Stay calm, stay diversified.

Recently, Doubleline Capital’s Jeffrey Gundlach advised investors to “Sell everything” as many asset classes look frothy.

A few months ago, RBS advised clients to “Sell everything except high quality bonds. Stay short commodities, especially oil…”

While we don’t know yet whether Mr. Gundlach’s predictions (or fears, should I say) would turn out to be correct, we know what happened to the RBS prediction.

Here is a blog post analysing what happened actually post the RBS call.

In both the posts, they missed out on one thing: diversification works. Many try to predict the future, but it turns out to be a futile exercise on most occasions. This is also an exercise where repeated success is a rarity.

Stay calm, stay diversified.

#RidingTheRollercoaster – 213

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