http://bizzylife.com/2008/07/why-investing-in-stocks-might-be-a-bad-idea/ For People Who Live Their Work Sat, 04 Feb 2012 15:04:01 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://bizzylife.com/2008/07/why-investing-in-stocks-might-be-a-bad-idea/comment-page-1/#comment-56 Jonathan Tue, 08 Jul 2008 06:12:26 +0000 http://thebizzylife.com/?p=140#comment-56 I think Ray makes a good point. While I can't quote the data exactly, I believe that the US is the exception rather than the rule in terms of the 'long term' return on equities - other developed countries such as Japan have had multiple decades of weak returns. Keep in mind that all the asset management and fund companies, even Vanguard, make higher fees on equities than fixed income funds, hence it's in their interests to recommend allocations that overweight the equities. The asset allocation models that I've reviewed that are NOT put together by fund companies (e.g. academics, third party oversight committees) increasingly recommend FAR lower allocations to both US and intl equities than the traditional models even for aggressive portfolios - 30-40% vs. 70-80%. I think Ray makes a good point. While I can’t quote the data exactly, I believe that the US is the exception rather than the rule in terms of the ‘long term’ return on equities – other developed countries such as Japan have had multiple decades of weak returns. Keep in mind that all the asset management and fund companies, even Vanguard, make higher fees on equities than fixed income funds, hence it’s in their interests to recommend allocations that overweight the equities. The asset allocation models that I’ve reviewed that are NOT put together by fund companies (e.g. academics, third party oversight committees) increasingly recommend FAR lower allocations to both US and intl equities than the traditional models even for aggressive portfolios – 30-40% vs. 70-80%.

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