How to Construct a Diversified Stock Portfolio of Major Index Funds
The Money with Katie Show
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Investing in a Diversified Portfolio
If you were a little more conservative, you went for the 5050 portfolio of S&P 500 and intermediate term treasury bonds. You would have slid into 2010 with $960,000. That's almost a 25% loss after just one decade of retirement. But what if you had diversified beyond only large cap growth equities? Well, then the decade wasn't so lost. Your original million dollars would have turned into $1.4 million by 2010 despite your 4% and annual drawdowns. Even Ben Graham said it could no longer be counted on to produce superior investment returns.
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