There is a need to insulate against all risk, but in the end this is impossible. There is always an element of luck that you can't control. I feel that some people concentrate on the negative outcome too much and lose the big picture. Plenty of people get fixtate on reducing the down market risk on their portfolio even while they are decades from retirement. Ironically, they would have been safer if they had just stick with the higher equity and had a bigger portfolio and is the more likely outcome. In the case of Japan, bonds did do better than stock, but the return would still be crappy any way.We can't know if the chances are good or not. We can only make assumptions.While history may not repeat (cough Japan), there's a good chance that you will be ok
There is a price for that assumption. I had an international allocation for decades. During the lost decade, it worked somewhat well, but in the last 15 years it has not. I have to fight the regret that I would have much more money if I had just stuck with all US, but in the end I stuck with it due to the fear of a Japan situation. If you have a diversified portfolio, some parts of it will lag, creating a sense of regret.
Statistics: Posted by gavinsiu — Tue May 19, 2026 8:20 am — Replies 42 — Views 2344
