I completely forgot about this - sorry!With the Russia nonsense going on, how do you feel about investments in Total International Stock Index Fund? I have tried to stay just under 20% of my TSM allocation, but I think that might even be a little high now.
This is how I look at international diversification: I know that international diversification helps, mainly because of decreased risk. On the other hand, it seems to me that while internationally diversified portfolios are better in terms of characteristics like Sharpe ratios, the improvement comes more in terms of lower standard deviation than in terms of realized return. (I would go even as far as to say that realized return may be lower.)
Now - I am interested in foreign diversification more for personal investment (where I may need to withdraw sooner) rather than pension (where long investment horizon already averages everything out). In addition, while international diversification may be important for a "citizen of the world", it may be less important for somebody who will 99% likely live in the US until death - because being primarily invested in the US preserves "standing within the US society."
So - I do have foreign stocks in my portfolio, but way less than the "optimally world-diversified" portfolio that mimics the "world index." [When my employer allowed specific investment in merging markets, I invested more there - but basically because of higher risk/return feature.]
HOWEVER - I am a contrarian, so I *love* investing in securities that lost in value (especially since I hope that everything will rebound in the long run). So I have been actually buying more international ETFs (for my personal portfolio) lately.
lol, I predicted what you were going to say in that last paragraph. Just this week, I moved my wife's target fund into separate index funds, and actually went from 15% international stock down to 5%.