willthrill81 wrote: ↑Mon Jul 04, 2022 2:10 pm
tibbitts wrote: ↑Mon Jul 04, 2022 1:44 pm
willthrill81 wrote: ↑Sun Jul 03, 2022 9:35 am
Fremdon Ferndock wrote: ↑Fri Jul 01, 2022 9:27 am
It's a real challenge to maintain one's AA in the face of these kinds of headlines. Hopefully, "buy and hold" isn't going to turn into "buy and fold". If I were a young accumulator, the worse it looks the better it is. But, if I'm a retiree drawing down my retirement portfolio not so much.
For a long time, some of us have been trying to warn folks that a portfolio comprised of only stocks and bonds isn't well diversified.
It doesn't seem like there has been any widespread recommendations for investments beyond stocks and bonds on Bogleheads. Of course there have been discussions of social security and annuities, but beyond those what alternatives have widespread support here on the forum? Certainly there's very limited support here for direct real estate, gold, commodities, etc.
I agree that there hasn't been widespread support here for assets beyond TSM and TBM, but history has been clear that asset classes like SCV and gold have been helpful, and we're seeing that again in the current downturn.
Bonds are the first tier of diversification and probably the only one necessary to establish a financial plan that is not based on predicting the market. They are the best first choice of diversifier because they can guarantee a nominal or real return, unlike your other suggestions. Most anything beyond stocks and bonds becomes the realm of personal preference, speculation, and diminishing benefits.
When I look at discussions of these assets I notice that there is a business of quoting expert predictions of what to buy but hardly ever when to sell. I notice that backtesting is the primary reason for selecting an asset, and that a rational case for an asset can often be missing. As a specific example it doesn't seem actionable to me for someone to invest in a gold with an expected real return for gold. I would argue that a very strong case has been made for a stock/bond index portfolio, and that the case is weaker from there.
The more choices a person has to make the more likely they will succumb to behavioral issues, whether that is picking past winners, trying to be in the cool asset, timing the market, or constantly changing strategy and being unable to stick to a plan. If unsuccessful predictions can only be measured over a decade while successful predictions are declared over a much shorter span, this sets up a condition for behavioral error.
In conclusion, there really needs to be a stronger case if the a majority Boglehead recommendation is going to be to have SCV, gold, commodities, and direct real estate. I think most disagreement is about assuming this are very likely to be beneficial for the majority of Bogleheads and thus should be default recommendations, and not based on the idea that nobody should own them.