International Investing for retiree
My assets under investment are with Vanguard and my advisor there recommends that of my equity investments 60% being in U.S. funds and 40% in International stocks. I’m a little uneasy with that and would like to reduce my international exposure in this crazy world. He is pushing back on doing that. Currently as a retiree my total equity versus fixed income breakdown is about 50/50 and I have a significant amount in cash/savings/CD reserves. Your thoughts?
Terry Says
The Savage Truth is that we will only know in hindsight! I’ve heard several experts, most recently investment super-star Jeff Gundlach, suggesting that in the coming year international markets will do better than the U.S. after our recent humongous gains. But my long-time experience tells me that when the U.S. markets decline, they bring down markets all over the world! I share your hesitation – -and maybe incorrectly (but I sleep well at night), right now I don’t have any international exposure!
So here’s an interesting question. Ask about the credentials of your Vanguard advisor.
Does he or she work for Vanguard — or were you referred by Vanguard to a private advisor who uses Vanguard Funds.
Ask if he/she is a Certified Financial Planner.
Ask if he/she charges for the advice you receive — above and beyond the cost of Vanguard funds. Ask exactly what that fee is –and what percentage of your assets, if there is a fee.
And most important ask if this advisor is a FIDUCIARY (someone who agrees — in writing — to put your interests first, and fully disclose all fees and commissions).
If you aren’t dealing with someone who is a fiduciary, certified financial planner, then you might want to get a second opinion from someone who is! Search at Wealthramp.com for a fiduciary, fee only advisor.
And finally, it’s your money — and you are entitled to make your own decisions, even if they are mistakes. Yes, by getting out of some international stocks you might not make as much money. But if you’ll sleep better at night, that’s your right. Ill bet your future losses won’t be keeping the advisor up at night!
PS What kind of bond funds do you own? Check into that — if you’re retired, make sure they are high quality, relatively short-term funds, no longer than 10 years average maturity (sometimes called “duration”) of the bonds in the fund. You can lose money in bonds, too, you know!
