A Broker Nightmare? An Educated Investor


I'm sure you've heard the talking heads telling investors "diversification failed" and "buy and hold doesn't work." But here's a scenario you won't hear from them, or from your broker. Say you invested $10,000 at the peak of the market on Oct. 1, 2007, putting 60% in a globally diversified portfolio of low-cost index stock funds and 40% in a low-cost, short term-bond fund that tracked the Barclays Capital U.S. Aggregate index. Your timing couldn't have been worse. The Dow closed at a record 14,087.