Both of you make excellent points.
I guess I'm jaded by the fact that VT (or e.g. VFFVX) has been almost flat for 2.5 years now.
A pure US investment would have fared better.
I'm pessimistic about bonds because of the debt bubble (gov debt, MBSs, CLOs, corporate bonds) and low yields.
Governments couldn't stomach higher rates, either.
In the big sell-off we have seen in March everything went down together margin-call style. I guess it did lower volatility, but it also provided little upside.
Euro yields are even negative.
I don't see how any of the countries possible exit strategies could be good for bonds.
> […] almost flat for 2.5 years now. A pure US investment would have fared better.
First: 2.5 years is a ridiculously short investment timeframe. I have sneakers older than that.
Second: perhaps it would have, but there was no way you could have known that ahead of time. Yes, from 2010-2019 the US markets (often measured by the S&P 500) has seen high returns. Now go back to 2000-2009 and see how things faired.
As a Canadian I often see often asking "why invest in Canada at all? why not go all-US?". This is often asked by people younger than 35 or so, who haven't looked up a bit of history, and only know about the last few years (look up the term "recency bias"). There have been times where Canadian equities outperformed the world, and also when international has outperformed the US:
You can make a good decision with the information you have available, but the result still be disappointing. See the video "How to Evaluate Your Investment Decisions":
I'm pessimistic about bonds because of the debt bubble (gov debt, MBSs, CLOs, corporate bonds) and low yields. Governments couldn't stomach higher rates, either. In the big sell-off we have seen in March everything went down together margin-call style. I guess it did lower volatility, but it also provided little upside.
Euro yields are even negative.
I don't see how any of the countries possible exit strategies could be good for bonds.
Thanks for the links!