Wow, Bruce! You apparently stirred the nest. After reading the comments to date, I would say that international exposure is certainly the consensus view. I, like you, am a contrarian, sort of.
I have a direct index of companies and it does include several internationally domiciled ones--Shell, GSK, TSMC, SLB, which at about 4% each puts me right is the recommended zone for that portfolio, but otherwise I have no direct international exposure.
Having lived much of my life internationally, I know first hand how different markets, regulations, and management can be. In Taiwan, the saying is every business has three sets of books. Of course, I'm not sure things are that different in practice in the US in that regard. I also know how complicated it is to move money and assets across boundaries, especially on short notice.
What I ask myself, though, is how would my perspective change if I wasn't based long-term in the US? I know that at the very least, with the dominance of US financial markets, those decisions would be harder and more perilous.
I loved playing monopoly more than once or twice. In the years I loved it, it was about the analysis. Learning about the money, the risks and rewards, and the race to income production. I don't know if that's where I learned it, but those same challenges presented themselves in my journey from a family where no one owned securities to where I am today.
I also learned that the ability to do these things is distributed quite unequally, whether due to age, gifting, experience, or whatever else comes into play. That was also true with the random and unequal distribution of properties.
We are giving much more than we ever have, but we still find it hard. In fact we have a couple DAF's (donor advised funds, essentially deferred giving) that have grown larger than most people's net worth. Why is it so hard to give money away?
For us, having always been very frugal, a big barrier is the loss of control. Once we give away the keys, someone else will make the decisions about how to drive. I try to calm this fear by reminding myself that I am also an inadequate, imperfect, deficient manager, and that giving away control is just like diversification, which in the long run will lead to a greater and more stable return on investment. We'll try to keep working on it!
If the goal is to protect against a loss, perhaps it is better to cover that loss with past gains instead of withdrawal from the markets. For instance, my gain this last year is 25%. Doesn't that 25% gain protect me from a 25% correction? After all, I was content a year ago.
To put it another way, I am in favor of meaningful diversification, but fail to see the value of withdrawing from the markets as a form of "safety."
On the other hand, I can understand Mark's perspective that having already won, he is happy to quit playing. [I'm not quoting you, Mark, just trying to capture the retiring from the markets thinking I am projecting as I read. Perhaps you can correct me by saying it better. I know it's a valid perspective widely shared in our community.]
Since I don't view it as a game, but rather a management challenge, I have personally voted in favor of staying fully invested. I do understand that staying fully invested means that a full collapse is also possible. That's why I treat diversification seriously. However, I assume if diversification doesn't protect me, neither will cash or bonds since they also require a functional economy.
That is one of many options on modern annuities, however generally options are not quite as good a deal as the basic annuity, so when you are shopping, it might not hurt to compare rates and consider alternative ways to accomplish the extras. From a sales point of view, these extras are designed to close sales that otherwise might be lost, as well as move away from direct apples-to-apples price shopping. (I'm not licensed any more.)
I only learned #1 this week when we had a scheduled call with an SS worker trying to start spousal benefit for my wife. (He was nice, by the way.) I missed this in my financial planning--she is not entitled to a spousal benefit since her income is higher than half my "FRA" benefit, yet we work together and file as self-employed. Reporting more income in her name would have (and will) increase her benefit. That's okay, I'm not perfect, but thanks for mentioning this, Adam. I wish I had heard it sooner.
I'm interested as to how you do the direct debit from checking. Can you explain? I've done it online, but not scheduled in advance. Is it just a matter of setting the scheduled date in the future?
For my part, I both pay the safe harbor amount, or more if I anticipate a bigger bill, and advise others to do so--right when we file the 1040 for the previous year. That eliminates withholding and forgetting both.
On the other hand, I also like and have used IRA withdrawals dedicated to taxes, often when I'm doing tax planning around November.
On the one hand, you are moving toward the margins, less relevant and more peripheral. On the other hand, you have discretion and choices in a wider measure. It will be interesting to see how these competing trends settle with you. May you find both meaning and contentment.
So sweet! Thanks for writing about this experience. Loving others through presence and awareness of their burdens. At 17 my father was in intensive care for three weeks and we thought he would die. It was overwhelming to all of us, but especially for me as the oldest child and only son and most of all for my mom. It left lasting scars.
This is one of those things that many tax advisors love to site for reasons why you shouldn't handle things yourself. I'm good at math and handle things myself, so I was quite conscious of and concerned about this as I went through these years.
However, as I ran scenarios I realized this was a bit of a false flag for me. Why? In the short term I was concerned about keeping my marginal tax rate at 12%, but I realized in the long term I would sooner or later be happy to keep it at 24% (using today's married tax brackets). That meant that worrying about these cliffs was insignificant long term compared to getting those tax-deferred dollars out sooner.
At the same time, I do always wait to decide how much to place in traditional IRAs vs Roth IRAs until I'm ready to file. That gives me a $17,200 cushion (in 2026) to dance around the edges of any cliffs when I actually file. Of course those traditional contributions are just going to be converted to Roth "next year."
Comments
Wow, Bruce! You apparently stirred the nest. After reading the comments to date, I would say that international exposure is certainly the consensus view. I, like you, am a contrarian, sort of. I have a direct index of companies and it does include several internationally domiciled ones--Shell, GSK, TSMC, SLB, which at about 4% each puts me right is the recommended zone for that portfolio, but otherwise I have no direct international exposure. Having lived much of my life internationally, I know first hand how different markets, regulations, and management can be. In Taiwan, the saying is every business has three sets of books. Of course, I'm not sure things are that different in practice in the US in that regard. I also know how complicated it is to move money and assets across boundaries, especially on short notice. What I ask myself, though, is how would my perspective change if I wasn't based long-term in the US? I know that at the very least, with the dominance of US financial markets, those decisions would be harder and more perilous.
Post: Do I really need International funds in my portfolio? I say no.
Link to comment from October 31, 2026
I loved playing monopoly more than once or twice. In the years I loved it, it was about the analysis. Learning about the money, the risks and rewards, and the race to income production. I don't know if that's where I learned it, but those same challenges presented themselves in my journey from a family where no one owned securities to where I am today. I also learned that the ability to do these things is distributed quite unequally, whether due to age, gifting, experience, or whatever else comes into play. That was also true with the random and unequal distribution of properties.
Post: Monopoly
Link to comment from October 31, 2026
We are giving much more than we ever have, but we still find it hard. In fact we have a couple DAF's (donor advised funds, essentially deferred giving) that have grown larger than most people's net worth. Why is it so hard to give money away? For us, having always been very frugal, a big barrier is the loss of control. Once we give away the keys, someone else will make the decisions about how to drive. I try to calm this fear by reminding myself that I am also an inadequate, imperfect, deficient manager, and that giving away control is just like diversification, which in the long run will lead to a greater and more stable return on investment. We'll try to keep working on it!
Post: Jonathan Clements Initiative at the Bogle Center for Financial Literacy
Link to comment from October 28, 2026
If the goal is to protect against a loss, perhaps it is better to cover that loss with past gains instead of withdrawal from the markets. For instance, my gain this last year is 25%. Doesn't that 25% gain protect me from a 25% correction? After all, I was content a year ago. To put it another way, I am in favor of meaningful diversification, but fail to see the value of withdrawing from the markets as a form of "safety." On the other hand, I can understand Mark's perspective that having already won, he is happy to quit playing. [I'm not quoting you, Mark, just trying to capture the retiring from the markets thinking I am projecting as I read. Perhaps you can correct me by saying it better. I know it's a valid perspective widely shared in our community.] Since I don't view it as a game, but rather a management challenge, I have personally voted in favor of staying fully invested. I do understand that staying fully invested means that a full collapse is also possible. That's why I treat diversification seriously. However, I assume if diversification doesn't protect me, neither will cash or bonds since they also require a functional economy.
Post: Doubling the Bear Market Low
Link to comment from October 28, 2026
That is one of many options on modern annuities, however generally options are not quite as good a deal as the basic annuity, so when you are shopping, it might not hurt to compare rates and consider alternative ways to accomplish the extras. From a sales point of view, these extras are designed to close sales that otherwise might be lost, as well as move away from direct apples-to-apples price shopping. (I'm not licensed any more.)
Post: Financial Choices
Link to comment from September 12, 2026
I only learned #1 this week when we had a scheduled call with an SS worker trying to start spousal benefit for my wife. (He was nice, by the way.) I missed this in my financial planning--she is not entitled to a spousal benefit since her income is higher than half my "FRA" benefit, yet we work together and file as self-employed. Reporting more income in her name would have (and will) increase her benefit. That's okay, I'm not perfect, but thanks for mentioning this, Adam. I wish I had heard it sooner.
Post: Financial Choices
Link to comment from September 12, 2026
I'm interested as to how you do the direct debit from checking. Can you explain? I've done it online, but not scheduled in advance. Is it just a matter of setting the scheduled date in the future? For my part, I both pay the safe harbor amount, or more if I anticipate a bigger bill, and advise others to do so--right when we file the 1040 for the previous year. That eliminates withholding and forgetting both. On the other hand, I also like and have used IRA withdrawals dedicated to taxes, often when I'm doing tax planning around November.
Post: If Retirement is Getting Close
Link to comment from August 22, 2026
On the one hand, you are moving toward the margins, less relevant and more peripheral. On the other hand, you have discretion and choices in a wider measure. It will be interesting to see how these competing trends settle with you. May you find both meaning and contentment.
Post: Fear of the Unknown…
Link to comment from July 25, 2026
So sweet! Thanks for writing about this experience. Loving others through presence and awareness of their burdens. At 17 my father was in intensive care for three weeks and we thought he would die. It was overwhelming to all of us, but especially for me as the oldest child and only son and most of all for my mom. It left lasting scars.
Post: A Letter 40 Years Later: What Mrs. Dolezal Remembered
Link to comment from July 5, 2026
This is one of those things that many tax advisors love to site for reasons why you shouldn't handle things yourself. I'm good at math and handle things myself, so I was quite conscious of and concerned about this as I went through these years. However, as I ran scenarios I realized this was a bit of a false flag for me. Why? In the short term I was concerned about keeping my marginal tax rate at 12%, but I realized in the long term I would sooner or later be happy to keep it at 24% (using today's married tax brackets). That meant that worrying about these cliffs was insignificant long term compared to getting those tax-deferred dollars out sooner. At the same time, I do always wait to decide how much to place in traditional IRAs vs Roth IRAs until I'm ready to file. That gives me a $17,200 cushion (in 2026) to dance around the edges of any cliffs when I actually file. Of course those traditional contributions are just going to be converted to Roth "next year."
Post: A $30,000 Mistake
Link to comment from July 5, 2026