This guy is a good writer. I suggest anyone having time go through their blog archive. Another great one on diversification and fear of missing out:
https://pensionpartners.com/diversifica ... ssing-out/
Snippets:
Any way you look at it (from a conservative to aggressive allocation), diversified portfolios have failed to keep pace with the juggernaut known as the S&P.
So why doesn’t everyone diversify?
Because diversifying means there will always be an asset class beating you. Today, that asset class is U.S. equities and the fear of missing out (FOMO) on further gains is palpable.
Over the past seven years, each of the following asset classes have all massively trailed U.S. equities: International bonds, U.S. investment grade bonds, U.S. Treasuries, Asia-Pacific stocks, European stocks, and Emerging Market stocks.
Of course, no one can be sure of what will happen over the next seven years and few can handle higher volatility/drawdowns than their risk tolerance suggests.
Which is why we diversify in the first place: to protect ourselves from the unknowable future and the visceral responses we all have to volatility/drawdowns. That protection is nothing to apologize for, even if it means massively underperforming the S&P 500 over a seven-year period. To the contrary, it is to be commended.
