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I sold all my S&P 500 holdings and the majority of my US stocks a while back to diversify internationally. Being so heavily concentrated in US markets felt too

by aranw 1y ago

I sold all my S&P 500 holdings and the majority of my US stocks a while back to diversify internationally. Being so heavily concentrated in US markets felt too risky at the time, so I pivoted to investing in funds, companies, and markets around the world instead

mhb 1y ago
OK. But shouldn't your first step have been going from S&P 500 to total index?
- dragontamer 1y ago
  His goals were to diversify away from the USA. Total Index is practically identical to S&P500 because Total Index is also market cap weighted.
  - lotsofpulp 1y ago
    The market caps of those US companies is huge because they do business across the world.
- lotsofpulp 1y ago
  But then they wouldn’t have felt smarter than everyone else.
- aranw 1y ago
  Even total market indices are not truly diversified though. For example the HSBC FTSE All World Index (which I do hold some of) still has a 58% US concentration and 27% in technology sectors (14% software services + 13% technology). For something marketed as global, there's still a massive concentration in the US and technology sectors
matltc 1y ago
Seeing lots of commenters say they dumped their entire position in SP500. That is probably not the best move I also felt overexposed to tech and about 80% of my stock portfolio was US total market or SP (basically the same) I have been dollar-cost averaging slightly out of those positions and into other small-/mid-cap funds. I have decreased my stock allocation as well and moving toward bonds and CDs, which are returning around 4.5-5% guaranteed. Interested to hear what others who speculate that SP overdue for correction might be doing
- aranw 1y ago
  > Seeing lots of commenters say they dumped their entire position in SP500. That is probably not the best move Fair point about dumping entire positions not being ideal. I got lucky with the timing since the market dropped shortly after I sold. Definitely got lucky on timing that Long term, I'll likely reinvest in the S&P 500, but as a much smaller slice of my portfolio alongside other indices, bonds, individual stocks, etc. The plan is to avoid that level of concentration going forward regardless of how well it might perform
- trashface 1y ago
  I've had small, mid and S&P funds for a while. Small-cap hasn't done great this year. One idea I've heard in the past is that its more directly affected by consumer weakness as it has a lot of consumer staples companies (and also probably more exposed to risk from tariffs). I've been slowly DCAing out into bonds, but I'm still over 80% stock total.

by aranw 1y ago

mhb 1y ago

OK. But shouldn't your first step have been going from S&P 500 to total index?

dragontamer 1y ago
His goals were to diversify away from the USA. Total Index is practically identical to S&P500 because Total Index is also market cap weighted.
- lotsofpulp 1y ago
  The market caps of those US companies is huge because they do business across the world.
lotsofpulp 1y ago
But then they wouldn’t have felt smarter than everyone else.
aranw 1y ago
Even total market indices are not truly diversified though. For example the HSBC FTSE All World Index (which I do hold some of) still has a 58% US concentration and 27% in technology sectors (14% software services + 13% technology). For something marketed as global, there's still a massive concentration in the US and technology sectors

matltc 1y ago

Seeing lots of commenters say they dumped their entire position in SP500. That is probably not the best move I also felt overexposed to tech and about 80% of my stock portfolio was US total market or SP (basically the same) I have been dollar-cost averaging slightly out of those positions and into other small-/mid-cap funds. I have decreased my stock allocation as well and moving toward bonds and CDs, which are returning around 4.5-5% guaranteed. Interested to hear what others who speculate that SP overdue for correction might be doing

aranw 1y ago
> Seeing lots of commenters say they dumped their entire position in SP500. That is probably not the best move Fair point about dumping entire positions not being ideal. I got lucky with the timing since the market dropped shortly after I sold. Definitely got lucky on timing that Long term, I'll likely reinvest in the S&P 500, but as a much smaller slice of my portfolio alongside other indices, bonds, individual stocks, etc. The plan is to avoid that level of concentration going forward regardless of how well it might perform
trashface 1y ago
I've had small, mid and S&P funds for a while. Small-cap hasn't done great this year. One idea I've heard in the past is that its more directly affected by consumer weakness as it has a lot of consumer staples companies (and also probably more exposed to risk from tariffs). I've been slowly DCAing out into bonds, but I'm still over 80% stock total.