And the gap between value stocks and in-favor stocks got a lot wider than I would have guessed. The lack of interest in bonds also surprised me. As a stabilizer and an income-producer, bonds have been a very attractive investment. But the overall flow of cash into the industry's bond funds was markedly negative during 2000. I would think, and hope, that the lack of interest in bonds has bottomed out.
Diversification is an underappreciated asset.
And it's not very expensive if you have perspective. The emotional challenge is that by definition when you're diversified, most of your assets will underperform the top asset class. Expensive in the short run is a whole lot different than expensive in the long run. Over the long run, lack of diversification can be incredibly expensive. Maybe it was a bad deal relative to stocks, but on an absolute basis or on an inflation-adjusted basis, bonds were a terrific deal.