A real question from r/Bogleheads that deserves a real answer. Not generic advice — specific steps.
If Bogleheads don't tilt toward small cap and/or value, I would assume one of the following is true: They aren't fully convinced that the risk is "compensated", and would expect a total market fund to outperform The risk may be compensated, but they don't want to stomach the added volatility I'm honestly not sure what to believe (I think the evidence is somewhat mixed). But I do occasionally see Bogleheads disagree on this. I'm curious, what is your position? Is there any specific evidence that guided your belief on this topic?
Small cap and value stocks have historically offered higher returns, but also higher risk. This "compensated risk" means investors can potentially earn higher long-term returns by taking on the additional volatility.
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