Q: Don’t you think you are suggest too many funds? I think all the portfolio needs is emerging markets, International markets and US REITs.These 3 essential troika asset classes will do well.
A: I’m not trying to get you to do unnecessary work, but I think you should break down the asset classes a bit more. In the international markets, the large cap index has way under-performed the international value and small cap asset classes. In the U.S., the small cap and value asset classes have made more than the REITs. I don’t recommend any of the asset classes without either adding return or reducing risk. On the other hand, I know what I suggest is a lot more work than your three fund portfolio. I am fighting for another 1% and I want you to fight for it too. By the way, we never KNOW what asset classes will do well, but we do know which ones did well in the past. There is no risk in the past. More diversification protects you from your threesome under performing the rest of the major asset classes. Of course, your three could be the cream of the crop. We never know!