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How will your strategy outperform the market? Are you assuming you only pick the best of the type of funds you mentioned that are out there? Yes, if each of the funds you mentioned hit the market average, then it would only take one of those going over the average to do better, but what if the others fall?

Many 401ks only offer up to 15 or 20 funds, and often there may be only 2 of each type you listed. So how does one know which funds to pick to "beat the market" with lower risk. And then there are the fees I don't think you suggested index funds, and I think about 90% of all funds fail to beat the market each year. So many investors pile into last years top fund that now a fund manager is burdened with deploying a lot more capital at diminishing returns.

I guess I equate massive fund investing with getting average market returns. You state that it will beat the market. By about how much? Are you beating the market by 1 or 2%, or by quite a bit, i.e. 7%-9% or more. How often are you re-balancing and how do you know when to move and what to move it to? If that is the case, your original suggestion sounded very easy, but it becomes harder to achieve in reality for an individual investor.

If its only 1% why not just say invest in an index fund knowing you will have some up and down years but it will average out?, and that 1% gain (if thats what you get by investing in many funds) will be offset by the lower fees charged by the index fund.

I think this is a great board for this type of discussion. And I am not saying CAT is the company to be 60% invested in, merely, he should consider it as one possibility.

I'm not attacking, just asking valid questions, to which I would like to hear your answers.
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