“Owning a loser is not an undue risk. It just means you're diversified.”
sputnikintelligence.com
The host asked whether a properly diversified portfolio should always have some part that drives you nuts. Lazaroff's example was how investors around 2012 wanted emerging markets and shunned US stocks, which then had their strongest run.
…to cash. And so you're seeing like, oh my gosh, we should probably just have more international. And Joe, you probably remember this. Like everybody just wanted the bricks. They wanted Brazil, Russia, India, China. They really wanted China. They wanted emerging markets. And so it was the hot button
then, like the magnificent seven
…are also. Not predicting the future and are low cost and rules-based like index funds that, yeah, like if you own a little bit of everything, you're going to do fine. And at the end of the day, like the academics will tell you that the reason that we invest is to grow our savings greater than inflation. So we want to grow them at a faster rate than inflation without taking undue risk. And Joe, owning a loser is not an undue risk. It just means you're diversified.
But I love the idea that we began with that the perfect portfolio begins with a goal. Because if you're investing for the goal and you have this tag toward the goal, you know, you see a lot of academics that say, I don't like buckets. But man, just from a psychological perspective and knowing that…
All right. Big red flashing lights of bias need to be pointed out that, like, I own an advisory firm. So when I tell you the best guardrail is to have an advisor, like, look, I hear you biased guess, biased voice. Let's
take the bias out of that. Vanguard says this. Yeah. Vanguard says have a financial advisor. So yeah,