SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Formerly About Advanced Micro Devices
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: bentway who wrote (328908)3/14/2007 10:06:47 PM
From: RetiredNow  Read Replies (1) of 1575623
 
I bet you didn't know that anyone who was fully invested in a diversified portfolio in the 20's and held on for the decade after the crash, would have fully recovered their money and made plenty of money on top of it.

Same thing goes for the 2001-2002 crash. Anyone with a diversified portfolio is well ahead of where they were prior to the crash. I know I am.

The bottom line is diversification. The big myth that most Americans are subject to is that somehow cash and bonds are the safest investments and that if you put all your money in those you are being prudent. Most rich people and financial planners will tell you that is folly. The whole point of diversification is to reduce risk by investing in a many different assets that move in opposite directions so that if one asset class is doing poorly, others are usually doing well, which means overall you are insulated from crazy movements in the markets. If you stick to just one type of investment, then you have actually increased your overall portfolio risk, even if that one asset is a Treasury.

For one thing, you aren't protected from inflation. YOu are making a pretty big assumption that inflation will always be tame. I think that is a more unrealistic assumption than my assumption that stocks will always outperform bonds over the long run. Especially when you consider record US deficits and debt and ballooning commitments to social security and medicare, topped with a Congress that is unwilling or unable to do anything to fix things. That's almost a guarantee for future long run inflation that trends higher than where we are at today.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News