OK, I'll clarify. When I say "seem to be saying", it means that you appear to be making the indicated assertion (see how the colors line up), i.e., that (b) and (c) are "not the same". Well, duh.I don’t followSo among these options:You can make a tilt towards international allocation higher than market cap weights, based on valuation/currency starting points and expected returns, and it's not market timing. It's simply taking into account existing prices. There are other reasons some may tilt towards higher intl, due to having concentration of other risks highly correlated to positive US outcomes (job, social security, etc).
This is NOT the same as those that only invest 100% in the US because they believe strongly it will always outperform. I still own plenty of US based assets due to diversification benefits even though I believe international has higher expected returns.
(a) overweight int'l due to timing/predictive reasons
(b) overweight int'l not due to timing/predictive reasons
(c) overweight US due to timing/predictive reasons
(d) overweight US not due to timing/predictive reasons
You seem to be saying "the reasoning behind (b) and (c) are not the same". Sounds like a tautology.
What I'm saying is that it adds no new understanding if someone says "an Int'l tilt other than for timing/predictive reasons is NOT the same as a US tilt for timing/predictive reasons". It's true, but it's a tautology, because the two things are different by definition (one explicitly said it was for timing/predictive reasons, and the other explicitly said that it wasn't). But that is what you said.
Likewise, one could have said "a US tilt other than for timing/predictive reasons (d) is NOT the same as an Int'l tilt for timing/predictive reasons (a)". Equally true, but, again, a tautology, for the exact same reason.
Tautologies may be true, but they aren't very interesting.
Hope that clears up my meaning. It's just an observation. If someone disagrees, please explain why.
Statistics: Posted by HanSolo — Sat Jul 13, 2024 6:04 am