Of course there will always be multiple concentration positions that diversified portfolios have underperformed over any given recent ten-year period.Over the last decade, college endowments as a group have underperformed the S&P by a large margin. Yale is a bit better by a couple of percentage points, but still markedly trails.
The tricky bit is they aren't the same concentrated positions overperforming in every unique ten-year period.
And it turns out looking at what worked best over the last 10 years, and betting all your chips on that also being the best for the next 10 years, is not a reliable strategy. Sometimes it works, meaning a specific concentrated position might overperform diversified portfolios for not just 10 years but 20, or possibly more. But historically, many of the best concentrated positions of the last 10 years at any given point have instead done the opposite, and underperformed diversified portfolios over the next 10 years.
And which will end up happenening turns out not to be reliably predictable. C'est la vie.
Statistics: Posted by NiceUnparticularMan — Thu Aug 28, 2025 9:29 am — Replies 29 — Views 2536