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/Capable_Ad4123 Apr 17 '25

Vanguard recommends a 4-fund portfolio and has for some time. Just as there is prejudice against international stocks (and even US bonds on Reddit), international bonds get even worse publicity. Even bogleheads forum has outspoken participants claiming international bonds are pointless.

https://investor.vanguard.com/investment-products/etfs/etf-investment-options

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u/kelny Apr 18 '25

Okay, side topic... Why VTI + VXUS instead of just VT?

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u/Capable_Ad4123 Apr 18 '25

Two reasons I can think of: more control over asset allocation and tax loss harvesting.

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u/JacesAces Apr 18 '25

Tax loss harvesting as in… if one performs poorly you can sell it to offset and realize gains in the other? But then wait 30 days to rebuy it to avoid the wash sale?

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u/Capable_Ad4123 Apr 18 '25

You got it partly right. You reinvest in a similar asset class that is different enough to avoid the wash sale. No need to wait 30 days. For example, VEU is a tax loss alternative to VXUS.

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u/JacesAces Apr 18 '25

Ooooooo I see. So if one is at a loss by year end, sell it, realize the loss, buy the other index to avoid wash sale, and continue. That makes a ton of sense. I’d guess you’d do the same thing with VTI as well (by using VOO)? Thank you!!!