This article proposes something closer to a market-weight position for all investors:
https://www.bloomberg.com/opinion/artic ... nd=opinion
Given the common belief here that future stock returns will be less than past returns, the recommendation of this article might make even more sense.Most people assume an 8 percent return from an equity portfolio. I’m not going to quibble with the historical returns of the stock market—everyone knows what they are—but I will say that few people realize those returns because of suboptimal behavior along the way. In other words, buying on the highs and selling on the lows. Or, they only faithfully dollar cost average on the way up.
This has given rise to a cottage industry of advisers who put their clients into low-fee index funds and then engage in “behavioral coaching” to make sure they don’t take their money out of the market at the worst possible time. It’s a little odd to pay someone to tell you to do what you should be able to do on your own, but an adviser wouldn’t even be necessary if you didn’t have a portfolio that scared the bejeezus out of you once every few years. It wouldn’t be necessary if you had a portfolio that you could set and forget.