midareff wrote: ↑Sat May 15, 2021 1:47 pm
Do you think owning historically under-performing equity asset classes makes you a smarter investor?
You are looking at ex-US equities as a separate sub-asset class from US equities.
You can just as easily look at sectors within US equities as separate sub-asset classes as well.
Technology, Consumer Discretionary, Industrials, and Health Care are currently the heaviest weighted sectors in US Total Market index funds.
Would you allocate your equities solely to Technology on the basis that it has outperformed other sectors? Some people have. Do you? Why? Or why not?
A few years ago, Health Care had outperformed other sectors. And some people allocated their equities solely (or far overweight) to that sector for that reason.
Equities as an asset class are global market equities. A Total World Market index fund is the default. It is the haystack. You can then choose to overweight equity sub-asset classes (or sub-sub-asset classes, or sub-sub-sub asset classes) from there. It has nothing to do with being smart or not. It is a personal decision you make that you then live with because you were unwilling to accept the average return of the whole.
If your overweight selection results in a higher return than the default haystack, you are a genius and everyone who didn't do what you did is not as intelligent of an investor as you. After all, it was obvious all along.
If your overweight selection results in a lower return than the default haystack, you are a fool who should have gone with the haystack and accepted the average return. Or been intelligent enough to overweight to what ended up being the higher performing sub-asset class. After all, it was obvious all along.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next."