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I've not read the books, but I plan to do some reading this winter. Does a less than 100% equities tend to offer higher returns long term or does it merely save on PeptoBismal?

Typically, equities have the highest long-term returns. Adding other asset classes (such as fixed income/bonds) will usually reduce the long-term returns, but it will also reduce the fluctuation in returns from year to year. So you are giving up growth to gain consistency.

It is easy for someone to say, "I have a long time, I want to go for the maximum growth." And they will feel great while the market runs up. But when the market turns south, a lot of these people will pull their money out of the market -- very often right before the next big run up.

For this reason, many people suggest a nice balanced portfolio that has money in multiple asset classes...US equities, foreign equities, bonds, real estate, etc. Then they suggest you develop a plan and stick with it for the long-term.

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