Using Asset Allocation to make money in a Flat Market: Re: Couch Potato Results : YTD Thru 7/31

» DennisL - Re: Couch Potato Results : YTD Thru 7/31

In response to message posted by Rande:

Thanks, Rande.

You said, On the flip side, when the market eventually turns up again such an approach requires the courage to underperform relative to being concentrated in and/or over-allocated to the "hot spots."

Your remark reminds me so much of the high-tech and aggressive growth fund go-go days of the mid and late 1990s. Around the water cooler here at work, at cocktail parties, or wherever I went and espoused the virtues of the couch potato portfolio, I was ridiculed and laughed out of the room by everyone else. They were all loaded up on high-tech stocks and aggressive growth funds, and bragging about how they were raking in 40%, 50%, 60% a year, or more.

When I talk to these same people now, the honest ones lament the fact that they have now lost 70% or 80% of everything. Even more shocking is that many of these people still refuse to diversify. They say things like, "Tech is still best. It will come back." and "Oh, well. I'm in it for the long run."

Thanks in very large part to your invaluable contributions to this site, I guess I got the last laugh. <img src=/images/emoteicons/happy.gif alt=smile>

-- posted by DennisL