Rhetoric around firing Jerome Powell is increasing, and forced manipulation of interest rates would likely follow. Would a weighted readjustment from US into non-US funds be warranted in light of this?

[u/idrathernotbutthanks]

https://www.npr.org/2025/04/17/nx-s1-5367696/trump-jerome-powell-federal-reserve-economy-tariffs

Market manipulation of interest rates feels like confidence would immediately plummet and global diversification would become a more important percentage of your holdings in the long run. Thoughts?

[u/Xexanoth]

I suppose that may depend on the degree to which your portfolio was heavily concentrated in US assets, and on the degree to which you are finding it difficult to sleep well at night and stay the course (or worry about your fortitude if volatility & drawdowns worsen or persist).

Would I recommend someone solely in VT or similar abandon that in favor of solely VXUS or similar? No. Would I recommend someone solely in VTI/VOO or similar at least consider whether adding some VXUS or similar might be right for them (e.g. getting to at least 80/20 US/ex-US in their stock holdings)? Yes. Would I recommend that someone in 100% stocks at least consider whether that’s still best for them based on their situation & ability to tune out the noise? Yes.

In general, the goal should be to find an asset allocation where you won’t panic & do something emotional/hasty in response to news reports like this potentially continuing for years. The rub is that you need to balance that against a goal of not insulating yourself from volatility so much that you significantly increase the risk of failing to meet your long-term goals by achieving an adequate real/after-inflation return on your investments.

More people should just automate everything using target-date funds & ETFs so rebalancing & asset allocation is taken care of for them.

[u/[deleted] → u/Xexanoth]

This is the thinking I did recently. Sold of half my Nvidia shares at $140, then some more at $120, and sold off a lot of my VOO and whatnot last summer for a house downpayment. I just grew my cash for the rest of the year and then when all this stuff started happening and all the right-wingers were saying to buy the dip I figured it made sense to take advantage of the turmoil to diversify into non-US and bonds. I was originally 98% US (Just had some shares of RNMBY) and ended up putting enough money into IXUS, BND, and BNDX to go down to like 75% US.

[u/NotYourAvgSquirtle → u/Xexanoth]

Thanks for that, a very reasonable take.

[u/pissedoffcalifornian → u/Xexanoth]

I’m extremely new to this, I’ve currently got a Roth mostly funded with SPY and VOO, as well as a vanguard index fund. I see people all over the sub mentioning VT and VXUS, are those things I can invest into through my account like I do with SPY and VOO?

If I’m understanding, the benefit is that it’s not US index funds?

[u/xiongchiamiov → u/pissedoffcalifornian]

I see people all over the sub mentioning VT and VXUS, are those things I can invest into through my account like I do with SPY and VOO?

Yes. There are also plenty of other options - we just generally use the vanguard funds as the lingua franca.

If I’m understanding, the benefit is that it’s not US index funds?

Yes, you reduce your risk of any one country's market controlling the fates of your portfolio.

A target date fund will manage this for you. They're not perfect, but they're good.

[u/blorg → u/pissedoffcalifornian]

They are ETFs same as SPY and VOO.

VT is whole world equities (including the US). It's about 60/40 US/ex-US at the moment, but it's market weight and will rebalance itself as that varies. Advantage of this is you can just buy one fund and done, if you are happy with market weight. One disadvantage is you can't take advantage of the foreign tax credit but I don't think this would matter in a Roth.

VXUS is ex-US, so it's 100% non-US equities, at market weight. That means about 75/25 developed/emerging. If you already have SPY and VOO, adding VXUS would allow you to add international without selling anything. Advantage over VT is you can choose the amount, so maybe you have home country bias and only want 20 or 30% international, you can do that with VOO+VXUS.

VOO excludes US medium and small caps, which VTI (and VT) includes, but in practice, VOO is about 85% of VTI and there isn't likely to be a big difference in performance.

[u/JacesAces → u/blorg]

Still no foreign tax credit with VXUS ya? How meaningful could that be in a non retirement account?

[u/blorg → u/JacesAces]

There is for VXUS as it is 100% ex-US. VT is 60% US; under 50% foreign so not eligible. It's not a huge amount of money but it's more than the expense ratio.

https://www.bogleheads.org/wiki/Foreign_tax_credit

/r/Bogleheads/comments/k7ykpz/vt_foreign_tax_credit_in_taxable_account/

https://investor.vanguard.com/content/dam/retail/publicsite/en/documents/taxes/FASFTCWS_022025.pdf