The Meb Faber Show - Better Investing cover image

The Meb Faber Show - Better Investing

MEBISODE: The Bear Market in Diversification | #536

Jun 4, 2024
This podcast features past guests like Ed Thorp, Richard Thaler, Jeremy Grantham, and more discussing the challenges and benefits of diversified portfolios during market downturns, analyzing asset allocation performance against the S&P 500, and exploring strategies for global diversification and risk management in investing.
12:23

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Quick takeaways

  • Maintaining morale and commitment to diversification is challenging amid consistent underperformance against US stocks.
  • Global diversification yields lower returns compared to S&P 500, highlighting the struggle of investor confidence.

Deep dives

Challenges of Diversification

Diversifying investment portfolios can present challenges, as illustrated by the underperformance of globally diversified portfolios compared to the S&P 500. Despite well-researched and implemented strategies, including global asset allocation models, investors faced disappointing returns and constant struggle. This period highlighted the difficulty of maintaining morale and commitment to diversification, especially when faced with consistent underperformance against US stocks.

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