Beware the Bias of Recent Performance

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Investors must be cautious of recency bias, especially when evaluating investment performance over the last 10 to 12 years, as it can skew their understanding and lead to incorrect conclusions. This bias is common among newer investors who may solely rely on recent data without considering the broader historical context. Analyzing a portfolio's performance during downturns relative to an all-stock approach reveals valuable insights, highlighting that diversified portfolios often mitigate losses during tough market conditions.

Choosing how to divide your assets among stocks, bonds, and other investment vehicles is a good first step, but asset allocation also impacts your tax rate, portfolio performance, and long-term ease of maintaining it all. In part two, Eric and Jason dig further into their own portfolios from their respective sides of FI and discuss the role of bonds, risk, tools you can use to assess your portfolio and model performance, rebalancing, and an interesting - not often discussed - case for financial advisors.

**Watch Part 1 here: https://youtu.be/OJG8_qct4hc

**Note: This content does not constitute investment advice and is being presented for informational and educational purposes only.