I understand there are risks in all aspects of investing.
I was just wondering if there was a greater risk of a fat tail with a larger allocation to stocks.
For example, If you have a 100% equity portfolio with a standard deviation of 20 versus a 50/50 portfolio with a standard deviation of 8, wouldn't it seem that the fat tail impact would be less (perhaps much less) in the 50/50 portfolio ?
To the extent that Bonds are safer than Stocks the answer seems to me to be yes.
Sure, no allocation is without risk. It does not follow that all portfolios have the same degree of risk.
"Fat tail" often has the direct meaning that the underlying distribution is not as nice as a Gaussian (Normal) distribution, but I don't think that is quite your question, so I would drop that word.
But even sticking with Gaussian plus black swans, if bonds are less subject to black swans than stocks, a bond heavy portfolio is less subject to black swans than a stock heavy one.
Unless I misunderstand the question, this is totally accepted wisdom and underlies such rules of thumb as "age in bonds" (among others). It also means that simple Gaussian (mean and standard deviation) examples like the one you gave miss the important issue here).
Mean and standard deviation examples offer only very simple and incomplete understanding, which is what I think some of the first replies are getting at. (though if I am wrong the posters will let me know.
Added, while typing my post several more appeared above, and my reference to first replies does not include them.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.