Is indexing good?

[sgeeeee]

Originally Posted by justin

So...* the moral of the story is hedge your US bets with a substantial allocation to a globally diversified portfolio?* (Don't tell anybody but a lot of passive investors do this already )

Yes. This is the easy problem for Greg to solve. Buy a low fee international index fund. But what is he going to do about that toilet?

[justin]

Originally Posted by ((^+^)) SG

Yes. This is the easy problem for Greg to solve. Buy a low fee international index fund. But what is he going to do about that toilet?

He won't have any time to worry about the toilet what with all the time he's spending trying to figure out how to beat the market.

[. . . Yrs to Go]

Originally Posted by Apocalypse . . .um . . .SOON

Reversion to the mean.* Happens all the time.* Cheer up, a billion Chinese will be better off.

I guess this makes sense if you view the world economy as a zero sum game - its not. The rise of Japan and Germany after WWII didn't take away from US prosperity, it enhanced it. Same with Hong Kong and South Korea. Similarly the rise of the US economy has been an engine of world growth, and rising living standards, over the past century. It's hard for me to believe that a billion people can improve their standard of living without making the world economy bigger - but I guess it is always easier to succumb to the natural fear of change.

Originally Posted by . . . Yrs to Go

- but I guess it is always easier to succumb to the natural fear of change.*

Ah, yes -- macroeconomic theory. If it only worked . . .

One reason that people fear change is that the effects of change are often visited so cruelly on a few people selected seemingly at random, while others, selected equally at random, prosper from it. Depends where you are when the music stops or changes, I guess.