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> Tell that to folks who bought Nikkei 30 years ago. Or the folks who held S&P 500 in the 2000s. But the lesson is simple: diversify. A 60/40 Japan equities/b
by throw0101a 5y ago
> Tell that to folks who bought Nikkei 30 years ago.
Or the folks who held S&P 500 in the 2000s. But the lesson is simple: diversify.
A 60/40 Japan equities/bonds portfolio would have ben fine:
* https://gfmasset.com/2020/01/60-40-has-worked-well-even-in-japan/ https://gfmasset.com/2020/01/60-40-has-worked-well-even-in-j...
Same as for the S&P 500:
> Yes, the data does show that 2000-2009 was a lost decade for the S&P 500. Passive investing has been unfairly attacked in response to this data, however, because of a misperception of what a proper passive investing strategy is.
> Passive investing does not mean one should buy-and-forget, but rather that one should limit trading to periodic portfolio rebalancing. Those who proactively rebalanced their portfolios actually profited, even when investing in funds that tracked that S&P 500.
* https://www.forbes.com/sites/investor/2010/12/17/the-lost-decade-was-a-golden-age-if-you-rebalanced/ https://www.forbes.com/sites/investor/2010/12/17/the-lost-de...
- gruez 5y ago>A 60/40 Japan equities/bonds portfolio would have ben fine: these days 60/40 is considered pretty conservative. in this environment holding to bonds means you're losing out to inflation.
- throw0101a 5y ago1. Bonds generally aren't there for returns, but to manage risk. When rebalancing (±5%) they end up being a form of 'dry powder' to buy equities during down turns. 2. While they may dampen returns (but also dips), one has to examine how much risk is actually needed to meet financial goals. Sure, more money is generally better, but not necessarily at the cost of other factors.