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A "balanced" portfolio

and other modern delusions

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Diversify intelligently

I cringe when I hear lemming-like talk about "balanced portfolios" and diversification.

As if having the right percentage of bonds vs stocks and growth stocks vs blue chips will somehow protect you against major market downturns and serious dislocations.

It's utter dreamland nonsense.

The wishful-thinking theory behind it all is to have so much varied crap that some of it is bound to go up while other parts go down and it will all balance out in the end.

Wrong.

In a deflationary environment, all the normal investment "vehicles" go down.

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