Why has an lagging asset class created more wealth?
Posted June 19, 2017
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I kept it very simple: 30% of his regular bi-weekly contribution was invested in a bond index fund, 35% in a US stock index fund and 35% in an international stock index fund.
Much to my surprise, when I reviewed his account the international stock index fund now accounts for 37.4% of his 401k account value, while the US stock index fund accounts for only 33.7%. (The bond index fund now accounts for 28.9%) The international markets, despite doing a lot worse than the US market, have been creating more wealth for him over the past five years than the US market!
What gives?
I won’t answer that question right now. Instead, I want you to think about it and send me YOUR explanation.
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