Reasons Not to Have a 100% Stock Portfolio Story

Reasons Not to Have a 100% Stock Portfolio

If stocks tend to outperform most, if not all, asset classes, why bother owning anything else?

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A seasoned investor may view that as a silly question, but those with only a decade or so of investing experience have seen the stock market climb steadily upwards, save for that blip in early 2020 that we recovered from quite rapidly.

Dr. Jim Dahle came up with 7 different reasons to diversify your portfolio to own additional asset classes and why an all-stock portfolio may not be such a good idea.

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#1 Why Not 130% Stocks?

I never see threads arguing for 95% stock portfolios. Nor 105% portfolios. It’s always 100%. I’m not sure what the fascination with that round number is other than it is round. Read More

#2 Why Not 100% Small-Value Stocks?

The primary reason people cite for 100% stock portfolios is because in the long-run, at least in the United States, a 100% stock port folio has had higher returns than a portfolio that contained any percentage of bonds. Read More

#3 Bonds Might Outperform Stocks

This idea that stocks always outperform bonds over 20+ year periods really only applies to the US and the comparative advantages the US has enjoyed in the pa st were significantly higher. Read More

#4 Easier to Stay the Course

When setting up a portfolio in “normal times” lots of stocks make logical sense. But staying the course in a bear market is not a logical experience. It is a profoundly emotional one. Read More

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