Percent of Portfolio in United States Equities?

[disneysteve]

OP says in the first post that he will be a college freshman next year. That makes him about 17-18 years old currently. Keep that in mind when reading this thread.

jc3900 - You mentioned the low savings rate of the average American. Do you know how that rate is calculated? It DOES NOT include retirement plan contributions. So if you were putting 25% of your income into your 401k plan and doing no savings outside of that plan, you would show up in the statistics as having a 0% savings rate. It also DOES NOT include home equity. In 2007, we prepaid about $6,000 of our home loan. We also made the regular scheduled payments that further increased our equity. That doesn't count toward our savings rate either in the national stats.

So that national savings figure is flawed and isn't really as alarming as it looks. Plus, it can't be accurately compared to the savings rate 20-30 years ago because of the 401k factor. And home ownership is at a record level today, much higher than 30 years ago, so not including home equity throws off the comparison, too.

[flatrock]

US

US imports most of its oil at a time of "peak oil", social security, medicare & medicaid entitlements ballooning with a ageing population, proposed national health care, potential homeowner mortgage/predatory lender bail-out , crumbling national infrastructure, current war & other potential conflicts,etc. In my opinon still the best country on the planet earth to live in but not a rosy immediate investing future and more taxes coming. Im 1/3rd international, 1/3rd S&P 500, 1/3rd domestic smallcaps---all the diversification available in the 401K, Thinking I need more after tax money to go in an international fund or ETF and plain old cash. CDs in roth acct at the credit union & TIPS or I bonds.

[buzz]

jc3900

If disneysteve is correct, and I am fairly certain that he is, then it is possible that your sources of information are terribly off base. What say you?

I eagerly await your next trumpet-blast...er, comment.

Edited to add...

Your 18 years in the USA have been a virtual unbroken string of prosperity. To put things in perspective, my grandfather faught in WWI, endured the Great Depression, raised a family during WWII, weathered the Cold War, Korean War, Vietnam War, social change, riots, assasinations and nation-wide campus unrest, until he died in the '70's during a period of economic doldrums, high unemployment and near-hyper-inflation. Perhaps we will all need to toughen up a bit.

[jc3900]

So are all you guys weighting your portfolios with a majority of United States equities? I think once I start getting my investment and saving wheels going(mostly getting through college and getting a real job) Iwill invest about 1/3rd of my investments in the US. What do you guys think of that. Should it be more or less.

On a different note, what is your opinion on the United States Entitlement situation and the fact that government spending has averaged about an 8% increase every year!

[buzz]

At your age, a significant tilt towards developed and emerging foreign markets may pay off handsomely. Rapid growth is probable, but emerging markets are volatile and subject to hurdles such as political upheaval and monetary failure. At your age, you have plenty of time to gamble. I, on the other hand, prefer the stability of US equities and merely augment with foreign holdings.

As for the sky falling due to entitlements, we've been thru far worse. The future may bring technical advances that radically change our lives, or it may bring turmoil such as we have never known. In any case, a rational, informed outlook will serve one well.