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Speaker Notes

The longer you own an asset class the more likely it will exhibit the characteristics for which you bought it. Too often investors buy and sell investments before giving them the chance to perform as would be expected. They like equities today only to like bonds tomorrow when bonds are outperforming. Next week they prefer large‐cap stocks only to favor small‐cap stocks next month when small‐cap stocks are winning. Chasing performance is a fool’s errand.

If you like the historical performance characteristics of an asset class then it is best to maintain exposure to that asset class for the long term. You’ll notice that in the short term there is a higher probability that cash will outperform bonds or bonds will outperform stocks than over the long term. Over any 10‐year period going back to 1926, bonds outperformed cash 100% of the time, stocks outperformed bonds 86% of the time, and small-cap stocks outperformed large‐cap stocks 86% of the time. Be consistent. It works.