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You still have to deal with the traditional TMF finding that over time S&P Index funds tend to outperform managed funds and hence are preferred because they are low cost in terms of management fees, trading costs, and capital gains distributions.

Also, international diversification has been discredited. It used to be that economies in other parts of the globe were insulated from the US economy. So you could diversify by playing the lead lag factor. Not any more. Modern electronics seem to have eliminated the hedge. Besides, why would you invest in Europe? They have mature, low growth economies and major problems with high social costs and entrenched labor unions that will resist any change. Their growth opportunites are in Eastern Europe and the third world, the same ones of interest to global US companies. Go visit a place like Mexico City. You will find all major global players there--fighting for market share. I would not say Europe has any particular advantage.

In theory managed funds can do better in a bear market than index funds (because index funds are stuck buying certain stocks even though their prospects may not be particularly good at the moment). In practice, if you check the data for recent downturns, I think you will find that does not work. Managed funds usually miss the market bottom. Even the pros are not good at market timing. Index funds still out perform.

TMF would not usually recommend guaranteed funds as an investment. Recently they have done well compared to stocks. Recently gold stocks have done well. Long term, stocks offer better returns. Fixed income investments are usually recommended for those close to retirement who will need the funds in the nearterm future. Then Fools would recommend a laddered maturity bond portfolio covering 5 years of living expenses.

For young investors, stocks are usually a better investment. Of course there are those who are saying stocks will take years to recover and we may be in for mediocre performance for some time to come. In that case, fixed incomes could be a better investment, but now you are into market timing again. Its difficult to do that right.
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