I'm 38, been maxing out my Roth IRA since 2019 with only VTI when I started saving for retirement. Don't plan in retiring before 65. If I want more aggressive growth, should I delay buying VXUS for another 15 years? Or should I start now?
80k in Roth in VTI
70k in 401k all in SP500
15k in taxable brokerage account in VTI as well.
Thanks for your opinions.
Don't try to time the market (in 15 years...). Diversifying reduces risk while not affecting expected returns. Unless you know something about the future no other investor knows, I would start buying VXUS until you get close to market cap ratios. Some home country bias is okay. After that, in your tax free accounts I would just buy VT for simplicity. In taxed accounts keep buying VTI+VXUS.
Exactly all of this.
Ex-US has outperformed US this year, though both are good. VT also has a PE of 22, which isn’t too bad if you’re worried about valuations.
I may check the market 20 times a day, but I have a bunch of VT and equivalents where I can’t buy it directly. It’s a positive sum game; let it do its thing and just watch (even if way too much).
Why not buy more VXUS in tax free accounts and balance the overall portfolio with more VTI on the taxable, so to reduce a little bit the tax drag from dividends that VXUS has more of?
Foreign tax deduction only works in taxable accounts and works for VXUS not VT.
Yes, but for the net position is often worse with VXUS in a taxable account. The yield is higher and part of the dividend is unqualified.
How do you figure?
If an investor bought $10k each of VTI and VXUS at the start of 2012, which is VXUS first full year.
VTI would be valued at over $65,000. VXUS would be valued at over 27,000.
That's almost 14 years of investing. That's despite VSUX outperforming VTI almost double in 2025. In those 14 years VXUS has outperformed VTI only 4 times.
Even if I go back to 1990 using Boogleheads 3 fund portfolio. The S&P has outperformed the 3 fund portfolio by 2.6% or over $200K of additional gains.
I think their whole point is past performance doesn’t guarantee future performance. Compare US to international from 97-2012. You never know what the future brings with wars and politics involved.
Everything you say is known to most other investors and is hence already incorporated in the prices.
Why VTI and not VOO?
VTI includes mid and small cap thus is more diversified.
The Roth and 401K are both tax-advantaged, so there's nothing stopping you from swapping some of your VTI/S&P 500 for VXUS (or VT, or whatever your 401k options are), right?
International is no less or more "aggressive" than US (although my 401k weirdly lists them as such), just a nice diversification.
VXUS and VTI are both diversified equity funds. One is international, one is US. They are equally aggressive with similar expected return and risk. There is no way to know which one will go up the most or down the least in future markets. However, you can be more or less diversified.
VXUS has similar returns as VTI?
Yes its a good idea to diversify outside of the US and VT is an option if you don't want to overthink the ratio between US to EXUS
No one knows, which is why the general guidance is to adopt a broad portfolio that is believed to, on average, offer the best balance of risk and returns.
"I want more aggressive growth"
A mantra in Bogleland is "nobody knows nothing". So you're not buying International for more aggressive growth, you're buying it to be more diversified.
You can buy a "growth fund" that screens stocks on that criteria and excludes "value" oriented companies, but it's not a guarantee that you will see more growth that outperforms. It's basically a speculative bet.
Diversifying into international markets isn't about slowing down; it's about not being 100% reliant on US exceptionalism. Waiting 15 years is just betting that the last decade's winners will stay winners forever. If you want VXUS, buy it now. Trying to time the exact decade when the US cools off is a losing game.
I intended to allocate more to VXUS next year, want more diversification and US market looks expensive.
While I underweight VXUS relative to most here (my ratio of US to ex-US is about 4 to 1, while the median of folks here will be closer to 2-1, with many split into either the 50-50 or the market cap camps) I think it is essential to diversify into international stocks. Until this year, I was selling US stocks to buy international, but in 2025, I have been selling international stocks to buy US.
Diversification is the best defense against risk
https://www.bogleheads.org/wiki/Domestic/international
VXUS and VTI have roughly the same expected growth. VXUS is a little higher expected growth actually because there are risk premiums associated with emerging markets. So by holding VTI and VXUS you just reduce risk for free. It's never a bad time to diversify.
International has been beating the US this year. Might as well own it too in case it keeps outperforming instead of investing in one country.
Thank you everyone for your input. I'll diversify starting next month by including VXUS or swapping my VTI with VT.
Appreciate you all!
Obviously you’re a vanguard fan. Where is your VUG this whole time seeing as you got another 27 years to go ???
VUG is already in VTI.
What am I missing? 2001 to present VUG is up 872% versus VTI up 476%
You are missing that past performance does not guarantee future results.
Well, you’re absolutely right we can only go back to VUG entire history, which is June 2001.
I think the original discussion and I may be wrong has to do with why 21 year olds are holding SCHD in a very high percentage and looking to retire in 30 or 40 years lol
To be fair, I am a VTI and chill individual
Id say yes. Doesn't need to be much but an 10% allocation should work
10% significantly underweights international. The actual market cap is about 36.5% right now.