to be accurate, diversification in 2001 internet .com crash

actually helped a lot, for example, value stocks were deeply discounted at that time.  The good examples are energy stocks and Birkshire Hathaway stock.  On the other hand, diversification (only in equity stocks) didn't help that much in 2008/2009 crash.  Well, if you could diversify your portfolio into bonds, especially those long term bonds, you shuld be doing very well.  For example, last year S&P 500 return was about even while the return of average TIP bonds was about 18%, very impressive.

I guess the issue here is, what's true diverification. I have to say, it is much easy to say it than really implement it. On the same note, we all know portfoio rebanlance is very critical. However, how to rebanlance it efficiently is a totally different story.  

所有跟帖： 

• Actually 30-Year Treasury Bond Gave Your Much Better Return Than -monkeyboy- ♂ (97 bytes) () 11/14/2012 postreply 20:41:55

• yes, a portfolio of 50% S&P 500 index and 50% bond -Jeepster- ♂ (192 bytes) () 11/14/2012 postreply 20:56:48

• agree how to rebalance is very important -planotx- ♂ (493 bytes) () 11/14/2012 postreply 20:51:43

• I have been using Birkshire Hathaway stock as the center -Jeepster- ♂ (78 bytes) () 11/14/2012 postreply 21:01:10

• smart, very smart... -planotx- ♂ (0 bytes) () 11/14/2012 postreply 21:28:26