Is my portfolio too risky?

CreditCardChris

Currently I'm investing in the Vanguard Global All Cap Index which is weighted 59.8% America, 17% Europe, 12.5% Pacific, 10.1% Emerging and 0.6% other.

But now I'm thinking this is too risky and I should play it safer and go with the Vanguard S&P500 index fund instead? I feel very uneasy investing in countries which have lagged behind the US for the last 100 years.

The world just isn't capable of keeping up with the US and the US is on the verge of breaking through into the space industries (moon / asteroid mining, space exploration etc). Why should I be risking my money in all these other countries when they're not actually doing anything but stagnating / being bought up by the US?

Prism

Investing in a single country adds in a couple of risks. You get a currency risk of what happens to the dollar. You also get a political risk such as what happens if the democrats win the election. 
Do you think the US will grow more than China? or India?

Thrugelmir

China is buying everything up not the USA. To quote an old Chinese saying "Loot a house while it's on fire". 

CreditCardChris

Prism said:

Investing in a single country adds in a couple of risks. You get a currency risk of what happens to the dollar. You also get a political risk such as what happens if the democrats win the election. 
Do you think the US will grow more than China? or India?

China isn't a democracy though and a lot of the world doesn't trust the Chinese government not to collect data. Could you imagine if Google or Facebook was a Chinese product? Chinese products and services are pretty much locked to China and their local neighbours, not only that but it's just risky investing in a non democratic country.

As far as India, yes I totally believe the US will advance faster. India still has a very long way to go to compete with the US.

*edit* and the US dollar is the strongest currency in the world, doubt we'll ever see our cute little pound go back up to 1.8 - 2.0 levels.

Sailtheworld

You think you'll make better returns by having a 100% America weighting and you doubt Sterling will strengthen sufficient to reduce the value of your dollar denominated holdings. It's obviously an increased risk though because you've concentrated your exposure to the US markets and USD.

It's just a case of weighing up whether you're confident enough in your predictions to take this increased risk.

grumiofoundation

CreditCardChris said:

Currently I'm investing in the Vanguard Global All Cap Index which is weighted 59.8% America, 17% Europe, 12.5% Pacific, 10.1% Emerging and 0.6% other.

But now I'm thinking this is too risky and I should play it safer and go with the Vanguard S&P500 index fund instead? I feel very uneasy investing in countries which have lagged behind the US for the last 100 years.

The world just isn't capable of keeping up with the US and the US is on the verge of breaking through into the space industries (moon / asteroid mining, space exploration etc). Why should I be risking my money in all these other countries when they're not actually doing anything but stagnating / being bought up by the US?

Why do you think that investing in one country is less risky than investing ~50% in that country and ~50% elsewhere? 

If you personally believe that the US (or more accurately the 500 biggest companies in the US) will outperform, on average, all other countries over the next say 20 years then go for it, but you shouldn't be viewing this as de-risking - in fact the opposite, putting all your eggs in one basket.

dunstonh

But now I'm thinking this is too risky and I should play it safer and go with the Vanguard S&P500 index fund instead?

That would increase the risk. Not reduce it.

I feel very uneasy investing in countries which have lagged behind the US for the last 100 years.

100 years ago, the US was an emerging economy.   That is no longer the case.  So, looking at the history of the US over that period is not even close to suggesting how it will be in the future.

Why should I be risking my money in all these other countries when they're not actually doing anything but stagnating / being bought up by the US?

The US is very successful in buying up emerging companies and putting it to commercial use.   However, the value in those smaller companies is not lost when they are bought.   So, there is enormous value to having investments outside of the US.  You have been told this before.

CreditCardChris

grumiofoundation said:

CreditCardChris said:

Currently I'm investing in the Vanguard Global All Cap Index which is weighted 59.8% America, 17% Europe, 12.5% Pacific, 10.1% Emerging and 0.6% other.

But now I'm thinking this is too risky and I should play it safer and go with the Vanguard S&P500 index fund instead? I feel very uneasy investing in countries which have lagged behind the US for the last 100 years.

The world just isn't capable of keeping up with the US and the US is on the verge of breaking through into the space industries (moon / asteroid mining, space exploration etc). Why should I be risking my money in all these other countries when they're not actually doing anything but stagnating / being bought up by the US?

Why do you think that investing in one country is less risky than investing ~50% in that country and ~50% elsewhere? 

If you personally believe that the US (or more accurately the 500 biggest companies in the US) will outperform, on average, all other countries over the next say 20 years then go for it, but you shouldn't be viewing this as de-risking - in fact the opposite, putting all your eggs in one basket.

Perhaps risk isn't the right word, maybe opportunity cost is better? I want the most bang for my buck and splitting my money 60% US and 40% rest of world doesn't seem like a good way to do it. The rest of world is basically like 1 giant bond index, you can make gains for sure but your gains are going to be peanuts compare to the great united states powerhouse economy. 

The last 100 years are proof the US is an unstoppable economic powerhouse churning out unicorn companies every 3.6 days on average. I honestly do believe the 500 largest US companies will outperform the rest of the world combined, again the last 100 years proves this to be true so why wouldn't it be true for the next 20 - 30 years also?

CreditCardChris

dunstonh said:

But now I'm thinking this is too risky and I should play it safer and go with the Vanguard S&P500 index fund instead?

That would increase the risk. Not reduce it.

I feel very uneasy investing in countries which have lagged behind the US for the last 100 years.

100 years ago, the US was an emerging economy.   That is no longer the case.  So, looking at the history of the US over that period is not even close to suggesting how it will be in the future.

Why should I be risking my money in all these other countries when they're not actually doing anything but stagnating / being bought up by the US?

The US is very successful in buying up emerging companies and putting it to commercial use.   However, the value in those smaller companies is not lost when they are bought.   So, there is enormous value to having investments outside of the US.  You have been told this before.

The value of those smaller companies that get bought up by US companies increase the share price of the parent company which bought it. Amazon, Google, Microsoft, Facebook etc. 

Yes the US was an emerging economy but it's 2020 and I don't see any other countries leading the way in electric cars, space flight and god knows what other industries will be created in the next 30 years. 

eskbanker

Thrugelmir said:

China is buying everything up not the USA. To quote an old Chinese saying "Loot a house while it's on fire". 

Don't suppose they'd have long to wait until the shooting started either....

grumiofoundation

CreditCardChris said:

grumiofoundation said:

CreditCardChris said:

Currently I'm investing in the Vanguard Global All Cap Index which is weighted 59.8% America, 17% Europe, 12.5% Pacific, 10.1% Emerging and 0.6% other.

But now I'm thinking this is too risky and I should play it safer and go with the Vanguard S&P500 index fund instead? I feel very uneasy investing in countries which have lagged behind the US for the last 100 years.

The world just isn't capable of keeping up with the US and the US is on the verge of breaking through into the space industries (moon / asteroid mining, space exploration etc). Why should I be risking my money in all these other countries when they're not actually doing anything but stagnating / being bought up by the US?

Why do you think that investing in one country is less risky than investing ~50% in that country and ~50% elsewhere? 

If you personally believe that the US (or more accurately the 500 biggest companies in the US) will outperform, on average, all other countries over the next say 20 years then go for it, but you shouldn't be viewing this as de-risking - in fact the opposite, putting all your eggs in one basket.

Perhaps risk isn't the right word, maybe opportunity cost is better? I want the most bang for my buck and splitting my money 60% US and 40% rest of world doesn't seem like a good way to do it. The rest of world is basically like 1 giant bond index, you can make gains for sure but your gains are going to be peanuts compare to the great united states powerhouse economy. 

The last 100 years are proof the US is an unstoppable economic powerhouse churning out unicorn companies every 3.6 days on average. I honestly do believe the 500 largest US companies will outperform the rest of the world combined, again the last 100 years proves this to be true so why wouldn't it be true for the next 20 - 30 years also?

The feedback you keep being given on this forum is to not only invest in the US (in fact thats the feedback you'd get anywhere). 
 
However you clearly think you know best.

So why are you continuing to ask for 'advice'?