In the late 1980s, just as a puppet named ALF landing on television sets across America, a couple of academic researchers issued a paper purporting to show 97 percent of a portfolio's return came from asset allocation, not security selection.
Or at least that's the way it was famously misquoted. By the end of the decade, and long after network TV sent ALF back into syndication space, a volley of papers went back and forth arguing whether or not investors had been duped by an asset allocation hoax.
Fast forward to the summer of 2012, and the news is ALF is returning, this time to the big screen. And, to keep the universe in balance, we've also had a new paper published suggesting, again and especially pertaining to 401(k) investments, our confidence in asset allocation may have been severely misplaced.
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
