Optimal Finance Daily · Wednesday, July 15, 2026
Erik Carter points out that many investors are not adequately diversified, often neglecting international and small-cap stocks in favor of stable value funds, bonds, and large-cap US stocks. He argues that these neglected asset classes have historically outperformed and should be included for a more balanced portfolio.
“Many just invest in a stable value fund, maybe some bonds, and large cap US stocks, like an S&P 500 index fund.”
“Other asset classes like international and small cap stocks are significantly underweighted or even completely neglected altogether.”
“In fact, small cap stocks have historically outperformed large cap stocks over long periods of time, and emerging market stocks have been outperforming recently.”