Home bias
Australian investors typically hold far more domestic equity than Australia's ~2% share of global markets.
What it means for your portfolio
Home bias concentrates you in one economy, one currency and one rate cycle.
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Correlations rise in a crash
In sharp sell-offs, correlations between holdings tend to rise toward 1 as almost everything falls together.
Most stocks underperform
Research by Hendrik Bessembinder found a small minority of stocks account for most of the market's long-run wealth creation.
Bonds usually — but not always — cushion
Bonds have historically softened equity drawdowns, though not in every episode (notably 2022, when both fell together).
General information only, not financial advice. Historical figures are approximate and provided for education.