Quote:
Originally Posted by bizaro86
On average, people's portfolio's are cap weighted, because by definition they have to be.
Umm, nope, to the bolded part. Obviously I haven't expressed myself very well. My point was that ON AVERAGE stock market investors made very little money so far this century. To those for whom that comprises their entire investing life, that causes a perception that stocks are an unattractive investment choice. That perception is likely incorrect, but explains why many are prepaying mortgages versus buying equities.
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People don't have to have cap-weighted portfolios at all. Why would they have to?
Maybe your point about the averages is where the disconnect lies. I think that the financial industry in general does a terrible disservice to people using averages for a lot of things. Retirement planning being one of the worst offenders actually, which almost brings this discussion full circle!