Quote:
Originally Posted by HockeyIlliterate
What are you talking about?
No one should put their entire $2 million in the stock market, but rather split the $2M amongst bonds and stocks (domestic and international), preferably index funds.
And the smart people did keep stocks in 2009, and the smarter ones bought more of them then too. And those people are quite likely enjoying the returns on their investments from that time.
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Bingo. That's the education part I was talking about. But when you go a step further and get even more education you learn that diversification is not the free lunch everyone thinks it is and you should be investing where the returns are. A balanced portfolio makes sense if you're not willing to know how to actively manage your dough.
Smart people, aka educated people, may have kept their stocks in 2009 but the huge majority of retail investors were punted. The only way to combat emotion is through knowledge. Buying anything, balanced or not, is a bad idea if you don't understand what you're doing.