for long term investments, why not go 100% emerging markets?

[hawk59]

Lebowski,

First, you really can't be sure that emerging markets will outperform. The chance of really bad things like currency devaluations, socialization of industry, civil war, etc etc is all much higher and it might turn out 20 years from now the US market has outperformed emerging markets because emerging markets got hit with a bunch of bad things along the way. But you really can't know.

Second, if you have a long time horizon then risk is not volatility and anyone who says it is doesn't know how to think for themselves. It's better to have a lumpy 15% then a smooth 12% assuming that you have the stability to ride out the lumpy parts. So if you do assume that emerging markets will have a higher absolute performance then yes you would want to put your money there.