Professor Jemery Siegle says: OWN THE WORLD video

[modeljc]

http://video.cnbc.com/gallery/?video=3000146806&play=1

Maybe 1/3 VTI  1/3 EEM  1/3 EFA

[Bean]

Take a look at VT, it takes the guess work out of "own the world"

[craigr]

Take a look at VT, it takes the guess work out of "own the world"

Yep. If I wanted total world stock ownership and no hassles I'd use VT.

[BP]

I took a quick look at the proposed world portfolio at etfreplay.com.  About a 60% maximum drawdown. 

[craigr]

I took a quick look at the proposed world portfolio at etfreplay.com.  About a 60% maximum drawdown.

Not surprising because a lot of markets outside the U.S. are tremendously more volatile. I guess as they say: "When the U.S. catches a cold the rest of the world gets the flu."

I don't see that changing much as long as the U.S. remains such a major component of global economic output for now.

[modeljc]

Take a look at VT, it takes the guess work out of "own the world"

Yep. If I wanted total world stock ownership and no hassles I'd use VT.

VT only has 13.6% emerging market.  If the growth in 20 or 30 years is outside the developed nations than VT will lag vs the Professor.
His allocation is probably +3% to +4% over SPY for 30 or 40 years??

If you are young and can handle volatility and big drawdowns and the world hold together it will beat the PP maybe.

[craigr]

Take a look at VT, it takes the guess work out of "own the world"

Yep. If I wanted total world stock ownership and no hassles I'd use VT.

VT only has 13.6% emerging market.  If the growth in 20 or 30 years is outside the developed nations than VT will lag vs the Professor.
His allocation is probably +3% to +4% over SPY for 30 or 40 years??

If you are young and can handle volatility and big drawdowns and the world hold together it will beat the PP maybe.

Well here's where I disagree with the Professor. I think most emerging market economies stink. They stink because they are in very corrupt countries with very corrupt cultures and a way of doing business that is going to keep them very volatile and low-performing. So I personally would only put into emerging markets what the total weighted markets says should be there. Other than that, I wouldn't overweight them in the slightest. They are a bad bet and will always remain that way.

Simply, we can come back in 50 years and I'm willing to wager most emerging market economies today will still be emerging market economies then. They face tremendous headwind and they are unlikely to change.

[AgAuMoney]

Simply, we can come back in 50 years and I'm willing to wager most emerging market economies today will still be emerging market economies then. They face tremendous headwind and they are unlikely to change.

At least, not without fundamentally changing more than just their economy.

Certainly 30 years ago I would not have predicted that Chile would be where they are today.  And even 20 years ago their democracy seemed like just another transition period between corrupt governments that was soon to fail.  And who knows, maybe in a year or 20 I'll be able to look back and sigh, "just as they really seemed to have gotten on the right track."  Or maybe they keep it up and we are witnessing the birth of a nation that could become a regional power and beacon the way the U.S. was 200 years ago.

[modeljc]

Yep. If I wanted total world stock ownership and no hassles I'd use VT.

VT only has 13.6% emerging market.  If the growth in 20 or 30 years is outside the developed nations than VT will lag vs the Professor.
His allocation is probably +3% to +4% over SPY for 30 or 40 years??

If you are young and can handle volatility and big drawdowns and the world hold together it will beat the PP maybe.

Well here's where I disagree with the Professor. I think most emerging market economies stink. They stink because they are in very corrupt countries with very corrupt cultures and a way of doing business that is going to keep them very volatile and low-performing. So I personally would only put into emerging markets what the total weighted markets says should be there. Other than that, I wouldn't overweight them in the slightest. They are a bad bet and will always remain that way.

Simply, we can come back in 50 years and I'm willing to wager most emerging market economies today will still be emerging market economies then. They face tremendous headwind and they are unlikely to change.

Yes very Corrupt but they offer the biggest rebalance deal out there because of the volatility.  A hard ride but so is the S & P.

Most of us can't handle the volatility.  I am 75 but I but try to see the future and not the past.  I know the PP the grounded in that nobody can see or predict the future.  I am OK with that and am a happy camper in the PP.  Thanks for this board and all your hard work.  And thanks again for the concept of a BOGEY. 

[escafandro]

Take a look at VT, it takes the guess work out of "own the world"

Yep. If I wanted total world stock ownership and no hassles I'd use VT.

VT only has 13.6% emerging market.  If the growth in 20 or 30 years is outside the developed nations than VT will lag vs the Professor.

VT does not adjust the weight of each market as they vary in size?

[melveyr]

VT does not adjust the weight of each market as they vary in size?

VT is cap weighted and so it is probably the best representation of the global equity market. I think modeljc just thinks EM has better prospects than the rest of the world.

However, I find the simplicity of VT to be very compelling.

[escafandro]

VT does not adjust the weight of each market as they vary in size?

VT is cap weighted and so it is probably the best representation of the global equity market. I think modeljc just thinks EM has better prospects than the rest of the world.
However, I find the simplicity of VT to be very compelling.

Sure, but "If the growth in 20 or 30 years is outside the developed nations..." Then VT should adjust their relative weights to reflect this change, right?