Investing - Theory, News & General • World Ex U.S has only returned 2.48% inflation adjusted the past 30 years

Is the U.S index the only index that makes sense to invest in?

If others have performed this poorly most would have been better off investing in other assets such as property etc. The U.S was an outlier that may not continue its performance, if you take the U.S out of the equation indexing doesn't look great at all. Isn't this hindsight bias / similar to stock picking? Using the top performing Index (US Index) as the basis to why indexing is great?

https://www.portfoliovisualizer.com/bac ... oA5bbj5nmx

This is along period of time to underperform

The US had negative real returns from 1966-1982.

Should one have abandoned that asset class after a poor stretch?

2.5% real isn’t great but for a retiree that invested additionally in the US they did just fine. I don’t think anyone advocates for exUS only, although many on here advocate for US only surprisingly.

ExUS is a cautionary tale to NOT only invest in a single country because what happened to exUS is possible and has had similar periods for US only investors historically.

Investing now in exUS may look like a great decision over the coming decades just like US was in the early 80s despite the negativity surrounding the “death of equities”

Also to note - exUS valuations were very high early on in this period and are now meaningfully lower; start dates and change in valuation matters significantly. Are valuations likely to go even lower? Possible, but I wouldn’t count on the next 30 years looking like the last

1966-1982 is only 16 years not 30 (the 2.48% figure probably goes back further than 30 years also but that's as far as portfolio visualizer would go) 30+ years is a long term period of time

Yes, it is not 30 years.

But it is CATASTROPHICALLY a worse scenario due to the sequence and the fact that returns were largely negative after inflation - because that sequence failed a standard 4% withdrawal rate.

Statistics: Posted by TheEternalVortex — Sun Jun 02, 2024 1:24 am — Replies 16 — Views 1493