Before my genius finance professor set me straight, I made some version of the below argument that “the stock market always goes up in the long term”.If that’s true, then as long as you are 10 or 20 years away, shouldn't you invest 100% of your retirement fund in stocks since they have the best long term returns?Only it’s not true – just check out Japan from 1989 to today.

Down 43% in 31 years (ignores dividends, but also taxes, neither of which change the basic conclusion). Even if you were 31 years from retirement in late 80s Japan, you’d still be waiting for the long term. The answer: DIVERSIFY – not only between stock markets, but between investment classes (I like real estate!).