No. of Recommendations: 2
Read a few of the GTAA research / backtests and papers by Faber, Antonacci, et al. It's great diversification to plan an allocation to international stocks, both large caps and small caps, and to international real estate. The allocations can be based on relative momentum, or just absolute momentum against their 10 month moving averages.

Such a portfolio backtests extremely well for volatility reduction with total return approaching large caps - for long backtest periods.

Unfortunately, the S&P 500 specifically (US large caps) has beaten everything for almost every time period for the last 11 years. The big money and the 401K money goes to the safest bets, and it has flowed to the S&P 500 index.
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