Is it time to make the PP and GB less U.S.-centric?

[Kevin K.]

It seems to me that Trump's tariff tantrum has exacerbated and accelerated some already-extant macro trends that taken as a whole make it highly likely that the U.S. is no longer going to be dictating the terms of world trade and cannot count on being the sole reserve currency of choice.

While Harry Browne rightly never trusted any government the PP is still built around the full faith and credit of the U.S. government being ironclad and a U.S. Stock index fund being all the equity exposure anyone needs.

I'm wondering if a more defensive approach is worth considering. For example, replacing VTI with a total world stock fund like VT (adjusts for global market percentages - currently 65% U.S., 35% International). The bond side is less obvious to me: BNDW is dollar-hedged which somewhat defeats the purpose, IGOV is int'l treasuries only, has tiny AUM and seems like a pure currency play that could easily backfire. Interestingly the Global Market Portfolio that Tyler has on Portfolio Charts could be implemented almost exactly using 45% bonds (40% VGIT, 60% IGOV), 50% VT for equities and 5% in gold.

Any thoughts appreciated.

[dualstow]

I know some people prefer VT (Vanguard total world) for stocks in their pp. I have some international indies in my vp, but no plans to change.

Whenever someone is reacting to politics or world events, or even the interest rate, I feel rather reactionary. I feel like that cartoon production boss who refused to adapt from black & white to color, and lost all of his best artists as a result. But, Trump is not going to be in charge forever, unlike my pp.

[Hal]

Just out of curiosity, back tested US PP against an international version. (VASIX/GLD)
Note that Gold/Shares/Cash&Bonds are 17%/17%/66% in both versions so allocations match (still within PP rebalance bands)

Seems similar for last 10 years using free version of Portfolio Visualiser.

[ochotona]

IGOV ETF has AUM = $830 Million

That's not little. It's not like IEF AUM = $34,715 million, but almost a billion dollars is certainly large enough to be a well-functioning ETF.

$20 million is the extinction point. I generally don't buy anything under $100 million.

[Kevin K.]

IGOV ETF has AUM = $830 Million

That's not little. It's not like IEF AUM = $34,715 million, but almost a billion dollars is certainly large enough to be a well-functioning ETF.

$20 million is the extinction point. I generally don't buy anything under $100 million.

Thanks for that clarification ochotona!

I guess the question for someone like me who unlike yourself is not an active trader is whether, given that there's already 20-25% gold in the portfolio is just diversifying the equities by going to global market weight (domestic:international) enough of a hedge against U.S. decline without getting into international bonds?