Instead of simply owning different stocks and bonds, a more robust strategy is to hold assets that perform differently under various economic conditions like high risk, instability, or inflation. This involves balancing high-volatility assets with stores of value like gold to protect against an unpredictable future.

Owning multiple stocks or ETFs does not create a genuinely diversified portfolio. True diversification involves owning assets that react differently to various economic conditions like inflation, recession, and liquidity shifts. This means spreading capital across productive equities, real assets, commodities, hard money like gold, and one's own earning power.

The real benefit of diversification is matching assets with different time horizons (e.g., long-term stocks, short-term bills) to your future spending needs. All asset allocation is ultimately an exercise in managing financial goals across time.

A more robust diversification strategy involves spreading exposure across assets that behave differently under various macroeconomic environments like inflation, deflation, growth, and contraction. This provides better protection against uncertainty than simply mixing asset classes.

The emotional drivers of FOMO (buying high) and panic (selling low) make the simplest investment advice nearly impossible to follow. A diversified, 'all-weather' portfolio protects against these predictable human errors better than high-risk concentrated bets.

BlackRock's CIO of Global Fixed Income argues that unlike equities, fixed income is about consistently getting paid back. The optimal strategy is broad diversification—tilting odds slightly in your favor and repeating it—rather than making concentrated, high-conviction "bravado" bets on specific market segments.

The goal of diversification is to hold assets that behave differently. By design, some part of your portfolio will likely be underperforming at all times. Accepting this discomfort is a key feature of a well-constructed portfolio, not a bug to be fixed.

The sign of a working diversification strategy is having something in your portfolio that you're unhappy with. Chasing winners by selling the laggard is a common mistake that leads to buying high and selling low. The discomfort of holding an underperformer is proof the strategy is functioning as intended, not that it's failing.

John Bogle's wisdom holds that the optimal investment strategy isn't based on historical performance but on what deeply resonates with your core beliefs. This ensures you'll stick with it during inevitable downturns, preventing the performance-destroying behavior of return chasing.