7. The One-Decision Portfolio

In the previous chapter, you saw examples from investment history that showed that with an appropriately selected portfolio, the balance between risk and reward for the portfolio as a whole could be better than the risk/reward balance of any of the individual investments within it. In other words, with proper diversification, the whole can be greater than the sum of its parts. This chapter describes a specific application of the principle of diversification by giving you an investment recipe that in the past has generated attractive returns at low risk. I have called it the one-decision portfolio, because after you adopt the asset allocation described in this chapter, all that is required from you in the future ...

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