Avoiding Mea Culpas With Alternative Assets

The Diamond Hill Long Short Fund (DIAMX Quote), for example, dropped about 25% in 2008. That makes an argument for modest exposure. There is nothing that says funds that did well in the last bear market will do well in the next one, which is why RYMFX and DLSAX combine to account for less than 5% of the portfolios I manage.

The idea in going so small is to avoid the regrets expressed in the WSJ article. These things should work, but, of course, should does not ensure they will work. I've been preaching moderation long before the bear market started and will continue to do so in the future.