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So, your returns were less than the S&P 500 due to your diversification. But somehow in a slipshod moment, he failed to mention the feather in the diversification cap – rebalancing. Your returns would have been even less if you had rebalanced at the beginning of 2014. How can he elide this factor when it’s a given in his overall playbook?
The only real Diversification I do is hold a certain % of my portfolio in Bonds, they serve a purpose, I consider them my CASH, returning 3+% in 2014, , and I won't give them up, though they do reduce my total returns (11% in 2014), I do change %'s (yearly) of total holdings I have in bonds....
So Big (S&P) companies had a good year last year, great...... I hold a lot of them, but not Always the case and nobody knows about 2015, so its hard to comment on being Diversified in other assets classes for 2015......just thinking
The whole article, in a single sentence: "In short, diversification failed to maximize your returns last year, and it won’t protect you completely from downturns this year, but it will keep you in the game and moving forward when things are nerve-racking."
My biggest disappointment in 2014 has been emerging markets as I own ODMAX & MAPIX both stock funds and TGEIX an em bond fund. Is it time to switch or hold? Three year performance is ok but the world is a mess in the near future and I think US is place to be for over 75% of portfolio. Other than that perhaps 20% international. Opinions appreciated.
I consider diversification not only in terms of large cap, small, intl, and bonds, etc but in sectors too. If I had not had my utility funds, reit etf and overweight in health care this past year, my total portfolio returns would have been considerable less. It is easy in hindsight to say if I would have had 100% in the S + P index, I would have had a nice 13% + return, but you never know when the tide is turning and by the time you do, you have likely lost half the runup. I am keeping my allocation to international, emerging market, energy, industrial where it is, who knows, they may be next years winners. I am 65% stocks 35% cash and bonds and will pretty much stay at that allocation.
Comments
But somehow in a slipshod moment, he failed to mention the
feather in the diversification cap – rebalancing.
Your returns would have been even less if you had rebalanced
at the beginning of 2014.
How can he elide this factor when it’s a given in his overall playbook?
So Big (S&P) companies had a good year last year, great...... I hold a lot of them,
but not Always the case and nobody knows about 2015, so its hard to comment on being Diversified in other assets classes for 2015......just thinking