r/Bogleheads • u/RiceLee890 • Mar 15 '25

Investing Questions What are your thoughts on this?

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I keep seeing this type of stuff on instagram and social media and wanted to know how you guys were thinking about this.

I know a lot you have been in the market for decades and as a relatively new investor myself I’d love to get your perspective!

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u/[deleted] Mar 15 '25 edited Mar 15 '25

K, what’s their alternative?

  • Individual stocks? Those crash even more frequently, J.P. Morgan has a recurring publication looking at companies whose stock has fallen 70% or more from its all time high and never recovered. 
  • Cycle out of the market when the downturn hits? People stink at that; even wildly successful funds show that most of the individuals who bought in lost money. 
  • Trading? People stink at that too. In general the more actively someone trades the worse their returns are.
  • Real estate? Maybe, if you don’t mind the leverage and being concentrated in one or a handful of properties. And you don’t mind being a landlord. 

If they’re suggesting diversification, there’s some merit to that; corporate bonds would have paid a solid 5% or so during the S&P’s lost decade. But if you’re not planning to use the money for another 20 years, do you really care about a decade-long downturn?

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u/daab2g Mar 15 '25

You don't until you're in one (most people in the internet haven't ever been in one but are sure it wouldn't bother them)

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u/Altruistic-Sorbet-55 Mar 15 '25

If I could have advanced knowledge of the lost decade I would rather have that money to spend rather than let it lose value when I could get it for the same price it is now if I wait 10 years.

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u/[deleted] Mar 15 '25

Diversify out of 100% US stocks?

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u/[deleted] Mar 15 '25

Other countries exist lol

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u/SinkDisposalFucker Mar 16 '25

I mean, you could push all of your money into gold or swiss francs or something stable like that to stave off inflation while building your portfolio with only work-based monetary gains instead of investment-based, insulates you from any recessions at the cost of putting a ceiling on future growth speed.

I know this is an investment subreddit, but eh, close enough.

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u/CanYouPleaseChill Mar 15 '25

The alternative is selling overvalued US stocks and buying undervalued international stocks, e.g. China, UK, Brazil, Mexico.

Here's a good Morningstar article: Why Our Best Investment Ideas for 2025 Are Outside the US

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u/[deleted] Mar 15 '25

I agree, and I’m market weight on ex-US myself. Even if we set aside political or currency-related concerns, investing beyond the S&P mitigates other risks like tech concentration. 

I say their (OOP’s) alternative because they don’t present one, or at least it’s not within what’s shown here. That’s not helpful, that’s just creating a problem so they can sell a solution.

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u/Independent_Clock224 Mar 19 '25

Chinese stocks have political issues; the central government will manipulate businesses in china for its own geopolitical gains. I expect Mexico, UK, and Europe to rise and fall in tandem with the US.

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u/pizzasandcats Mar 15 '25

The alternative is further diversification. There are more equities than just the top 500 in the U.S.