Just the possibility of a lost decade for the S&P 500 warrants maintaining a diversified portfolio. The challenge is maintaining an adequate allocation to the segments of the market that are underperforming the most popular strategies. The market moves quickly so we would not likely capture the benefit if we waited until the new trends were clear to everyone. If I had the ability to correctly time when the dollar was going to weaken, we wouldn’t need to maintain an international allocation. Investing would be very easy if we only had to own the strategies that worked best for the past ten years. As Warren Buffet said, “If past history was all there was to the game, the richest people would be librarians.”
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Eric Barden, CFA