Surely Mr. Market is aware of the risks involved with ex-US stocks. Including currency risk, which can work in your favor as much as it can work against you.In some alternate universe you are a US only investor, and would have to contend with the “stay the course” principal there as well. But only one of you is correct. Staying the course doesn’t guarantee optimal outcomes, it merely avoids extremely sub-optimal outcomes.
As for your dilemma, IMO Bogleheads have this blind spot on diversification, where they treat all countries as more or less playing the same “sport” with the same rules, and thus similar outcomes over sufficiently long time horizons (decades to generational) … let’s call this sport “capitalism”. But they aren’t.
Increasing your US stocks from 10 to 100, is not the same thing as doing this across international borders. The version of the “sport” is not only different… but in many cases it isn’t even remotely the same sport. The culture, levels of corruption, the laws, the regulations are wildly different, so nobody should be surprised the outcomes are different.
I’m going to just be clear here: I think it is structurally impossibly for European and Asian countries to outperform the US over multiple decades with their present setups. Impossible. Period. End of story. Don’t even kid yourself. Delete this from your brain.
This is just common sense: Making things harder for people to do, leaving them with less money, spending less not more time being economically productive, having fewer resources, a weaker military… isn’t going to magically lead to better performance. If it did, we’d all be speaking Russian right now, but we aren’t.
Now, does this mean international diversification is useless? No. It will still impact the volatility (risk) of your portfolio, but what it won’t do, is increase your overall returns.
So if you want less volatility? Maybe a little less risk? Sure, go for international. But to me, bonds are and always have been a better tool for that job.
Statistics: Posted by VTWAXandChill — Sat Feb 21, 2026 5:08 pm — Replies 32 — Views 1273