Home Bias Harm

Don and Tom tackle the behavioral trap of “home bias” in investing—why U.S. investors tend to overinvest domestically and why it’s dangerous. They compare global fund allocations across countries, poke fun at nationalist investing instincts, and explain why international diversification is essential. Listener calls cover early Social Security regret, 72(t) withdrawals, covered calls on Palantir, and what happens to target date funds after they “expire.”

1:52 Home bias explained: Americans (and Australians) overweight U.S. stocks

2:58 U.S. vs global stock market value debate

3:42 Fund companies pander to investor bias

4:14 Vanguard Australia fund: 42% Aussie stocks?!

5:25 Why home bias hurts—Australia’s 25% bank exposure

6:26 Dimensional and Avantis global tilt: 70% U.S.

7:52 Long-term global diversification reduces volatility

8:17 The 2000s: Global funds outperformed U.S. funds

9:21 Call: Donna in AZ – Regret over early Social Security filing

11:29 Don confesses he took his at 69: “I’m weak”

12:02 Donna’s still in great shape—no panic needed

13:04 Timing Social Security: Only critical if it’s most of your income

14:45 Emotional investing vs logic—why home bias persists

15:51 Japan: Home bias disaster, zero returns since 1990

16:07 Call: Kyle in TX – 72(t) withdrawals and bond reluctance

18:21 Tom explains why bonds matter when pulling from a shrinking stock portfolio

19:51 Call: Jason the Tesla Bull – Covered calls on Palantir

21:15 Covered call mechanics explained

23:14 Don’s 1980s crash story: When covered calls fail

24:14 Covered calls appeal to greed, often backfire

25:20 Palantir’s PE ratio? Try 1,058—yikes

26:30 Meme stocks vs megacaps: Palantir’s government dependency

27:05 Call: John in OH – Fidelity fee confusion update

28:16 John’s advisor can’t see the same statements—sus?

30:32 Make sure to bring statements and get written answers

31:29 Don’s birthday, Father’s Day gripes, and Twain wisdom

32:22 Call: Elizabeth in SC – What happens to a 2010 target date fund?

33:37 Vanguard 2010 funds merge into 70/30 “retirement income” fund

35:14 Performance? ~5% annualized—above inflation

Learn more about your ad choices. Visit megaphone.fm/adchoices