Quote:
Originally Posted by qba335i
Not exactly... let's look at actual data vs your opinion.
1) 20 years ending Sept 2018:
Mid cap, small cap, real estate and emerging outperformed large cap (S&500)
2) now let's look at a diversified portfolio => ending value of $1 invested 12/1990 through Sept 2018. Maintaining the same risk premium:
- 100% of portfolio invested in Large Cap => $16.51
- 62%LC/1%Bonds/18% Mid cap/4% small cap/15% reits => $18.99
Buffet returned -32% in 2008. He would have to close his shop if he managed a hedge fund. I know some ABS hedge funds that make the S&P 500 look like a bond fund - when you look at total returns since 2008/2009.
|
Returns for 1 year don't matter. The exercise was done for a 10 year period, which is about the shortest period that makes sense when you're investing long term.
And your data is fine...but you don't need a PM to do it. I don't have any problem with other index funds, including small, mid and large cap. I'm saying that for the general investor, they don't need a PM to help them buy the S&P500 and other index funds...and essentially all you need to beat most pros is consistent buying of ONE index fund (S&P500). I'm keeping this simple since it's a beginner's advice thread.
You also proved by point that bonds are terrible investments for long term investors.