Since no one can predict what the best-performing asset class will be in the future, diversification increases the odds of being in the right asset class at the right time.
Our focus today will be on the latter two, diversification and time, although having a disciplined financial plan and supporting it may be the most important ofthe three.
Now in a new book Malkiel moves on to extol the virtues of global portfolio diversification--in index funds and actively managed funds -- at a time when many investors are licking their wounds from Southeast Asia, Russia and, not so long ago, Latin America.