Tyler did a segment on foreign ETFs by interviewing James Pacetti of ETF International and Paul Mazzilli of Morgan Stanley.
There was not a lot of meat on the bone. Morgan Stanley recommends 12%-20% in foreign stocks with their favorite area being emerging markets.
Mr. Pacetti said that a minimum of 10% a portfolio should be foreign but was not given time to elaborate, although he clearly had more to say.
For what its worth I have around 30% of my clients portfolios in foreign equities, mostly through individual stocks.
If anyone watching did not know that there are ETFs that provide foreign exposure, they know now but I think we may be a ways from some real meaty content on TV.
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5 comments:
Regarding asset allocation:
If my allocation is determined by the Fed rate cycle, what do I do between the last rate hike and the first rate drop? That seems like a nebulous period. What is the volatility usually like during that period?
I view this differently than the way the question is asked. Data points, the yield curve and other factors often signal what is going on with the economy. The fed reacts to that as well. In periods where it looks like weakness is coming that usually favors consumer stocks (think relish, nilla wafers and cigarettes)and health care.
If thinks appear to be perking up, I would look to basic materials, industrials and semi conductors.
I don't know of any good volatility data to answer your question. the slow down now looks different than the decline in 2000/2001 which looks different than the one in the early 1990's.
Assuming a balanced, diversified allocation:
Do you shift directly from equities to bonds when the Fed starts lowering rates?
or,
Should you have already raised cash by the time the Fed starts lowering ... and subsequently shift cash to bonds.
Does anybody think that volatility will increase when Greenspan leaves? At least in the beginning.?
sorry for the delay. the driver for me is equities. based on what is going on do I want to own less stock. If so what do i move into. that depends on on that time in the market. rates are very low now. to me that means owning short dated preferreds with any defensive money. I have also reduced the volatility of my equity postion a little bit.
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