Comments on: Investment Volatility vs. Portfolio Volatility http://www.obliviousinvestor.com/investment-volatility-vs-portfolio-volatility/ Investing Blog: The Oblivious Investor Tue, 07 Feb 2012 17:04:11 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Monevator http://www.obliviousinvestor.com/investment-volatility-vs-portfolio-volatility/comment-page-1/#comment-88 Monevator Fri, 28 Nov 2008 08:34:34 +0000 http://www.obliviousinvestor.com/?p=452#comment-88 Another problem is for obvious psychological reasons, people typically come to asset allocation at exactly the wrong time. We're reading a lot about it now (I don't mean here, I mean in general in the blogosphere/media) because it's clear if you were 50% in bonds/cash or whatever, you'd be well up versus someone 100% in stocks, given the market falls. But if you're going to suddenly embrace diversity in your portfolio you should do it when the high return class has enjoyed several years of growth, not when it's depressed. i.e. 2000 or 2007. (And then maintain your asset allocation going forward, and try not to be too clever, of course! :) ) Another problem is for obvious psychological reasons, people typically come to asset allocation at exactly the wrong time. We’re reading a lot about it now (I don’t mean here, I mean in general in the blogosphere/media) because it’s clear if you were 50% in bonds/cash or whatever, you’d be well up versus someone 100% in stocks, given the market falls.

But if you’re going to suddenly embrace diversity in your portfolio you should do it when the high return class has enjoyed several years of growth, not when it’s depressed. i.e. 2000 or 2007.

(And then maintain your asset allocation going forward, and try not to be too clever, of course! :) )

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