I agree completely, Pop.

I have not been invested in U.S. equities going back to the Summer of 1996 because of the out-of-control valuations. People will sometimes ask me why I don’t invest in Japanese equities since they had their crash a ways back. My response is that that might be a good idea and that might not be a good idea. I would need to study the Japan market for a long time to know and I just don’t have the time available. I may be passing up a good opportunity. But I prefer taking a chance of doing that to putting any money into something re which I do not possess a deep understanding.

These foreign funds may be awesome for those who understand them well. Those who don’t will get thrown from the horse sooner or later. When you don’t possess deep understanding, you lack the confidence needed to get through hard times. And my view is that that is pretty much the entire deal. Once of the things that I love about Bogle is that he encourages regular people to keep it simple. By investing in only a small number of basic investment classes, you can get to understand those few investment classes well.

My view is that those who have not yet had the time to come to a deep understanding of the most basic asset classes should not be devoting any time to the less essential stuff. For sophisticated investors with lots of time for research, it’s a different story.

Rob