richjoy

In Light of Peak Oil, Financial Diversification Is a Bad Idea

oldgoldbug: Given your handle, I suspect you know something about 'can't miss' bubbles touted by those who reinforce each other with a steady stream of blather.

Agreed, interest rates on long bonds and 10-yr notes are not set by the Fed...and in the face of growing inflation, should be still higher than they are today. Are they telling us there is more economic pain ahead?...perhaps (and if so, oil consumption will decline by still more than we have seen recently).

In Light of Peak Oil, Financial Diversification Is a Bad Idea

Don't know why I bother, as you kids are so sure in your positions that you only half-listen to those with far more experience:

I've been investing for almost 40 yrs. I've seen a number of bubbles, including sure-thing 'nifty-fifty', technology, and now peak oil. They come along and folks can't see beyond the hype, they think they will be money machines forever. They were not...and 'peak oil' won't be either.

I've learned many lessons from my mistakes.

I'll pass along just this one...over the course of the economic cycle, it isn't your big winners that are most important to your wealth; it's your big losers! If you allocate too much in one place, you are setting yourself up for huge losses.

Therefore, anyone who tells you not to diversify should be shunned.

That doesn't mean you should never overweigh 5 or 10% pts. in mega-trends -- like energy, alternative. energy, health care, or materials, for example...but anyone who leaves bonds and broad S&P 500 stocks out of his portfolio is going to pay dearly before this economic cycle ends.