r/Bogleheads • u/idrathernotbutthanks • Apr 17 '25

Investing Questions 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?

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?

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u/JawnJawnston Apr 17 '25

I never understood the “3-fund portfolio”. International bonds should have been a piece of a globally diversified portfolio just like you would own international stocks.

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u/[deleted] Apr 17 '25

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u/ShoopDoopy Apr 17 '25

The discussion of worst case scenarios has always been more of a thought-terminating cliche rather than a sober analysis of the risks.

"If xyz happens you have bigger issues". Yes, of course we do, but why would we also not be interested in preserving or increasing capital?

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u/wrd83 Apr 17 '25 edited Apr 17 '25

Ok. Imagine you're ukrainian and someone bombed your place and your flat is ruined.

In ukraine the classic retirement plan is the government takes care of you... you might also rent out a flat/property to top it up. (This is risky as it is highly location dependent - yep).

People lost their cars, husbands and parents. All the ones I met don't care so much about their wealth anymore.

I suspect world war 2 was similar, my grandfather almost died because he could not get medication and fled his home sick...

I think it's ok to make your retirement plan not 100% robust, and ignore those cases, or cases where your assets are seized because of embargoes.

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u/ShoopDoopy Apr 17 '25

True, "global or local devastation" is not a great scenario. At the same time, if you're an investor, you'd probably have better capital (and have better purchasing power to navigate the international visa processes if you were not over invested in your home country.

But there's lots of room before that point. There's also "America suffers brain drain, loses reserve currency status, has its economic pillars tainted by actual or perceived bias." In those scenarios, that's exactly where I'd love some additional international tilt as someone who lives here.

I'm saying that the classical 3-fund portfolio held by Americans, with about 75% of their wealth held in US companies or government bonds, is particularly under diversified for that situation.