In a bear market as severe as ours, all the nuts come out. You can read about how buy and hold is dead and how asset allocation doesn't work.
Recently an article in Wealth Manager caught my eye, one paragraph in particular that summed up the asset allocation issue nicely.
"Since the end of 2007, the broad-based fall in equities has drained a mind-numbing 30 trillion of value from the stock market. Worse yet, amid the economic meltdown of 2008, investors were punished across essentially all asset classes -- regardless of the level of diversification. Not surprisingly, then, reasonable people have been asking the question: Does diversification still work? Yes, and unequivocally! It's just not a hedge against short-term loss." - J. Gibson Watson III
Roger Gibson is a very famous (to us) asset allocator. He has several books worth reading. My favorite for clients is "Simple Asset Allocation Strategies: Easy Steps for Winning Portfolios". You may need to search for a used one as it may be out of print.
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