How safe is the stock market?

[kimchi]

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According to this, over the last 35ish years having 25% in bonds would given about 12.75% annualized while 0% bonds would have yielded 14.4%. 1.65%/year is certainly nothing to sneeze at.

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Right, but look at the worst 60 months for 70% equities vs 100% equities. It's basically +7% vs -7%. That is also nothing to sneeze at!

So I guess my question is why/when did a lot of people stop caring about diversification relative to absolute gains? I wonder if it's just a case of time horizon. For example, over 10 years maybe it's very important to be diversified but over 30 years it is sufficiently dominated by absolute returns that you can (reasonably?) ignore diversification.

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Thing is, there's also the 'ulcer index'. I highly volatile portfolio is more likely to push the holder into buy/selling at exactly the worst time.

How many people (I'm guilty too) bought tech stocks in early 2000 and sold them in late 2002?

A well diversified, steady portfolio is more likely to help the average investor stick to his strategy - buy & hold