A blast from the past...

Someone reminded me of an article I wrote for the Tennessee Medicine, the journal of the Tennessee Medical Association titled "Eating Pie Will Keep You on the Treadmill" in January 2008. It was later reprinted in Knoxville's CityView Magazine in April 2008.

In the article, I warned that conventional asset allocation commonly presented by financial planners as pie charts may be costly for investors. If you eat too much pie, you may have to stay on the treadmill longer that you want. 

As you read the article, please note that it was printed prior to a decline in the U.S. stock market of more than -50%, a decline in International stocks of more than -60%, a decline in the Lehman Brothers Aggregate Bond Index of -13%, a decline in the commodity index of -70%. That is, no "asset allocation" pie chart protected people from the waterfall cascades. The only protection was to actively manage the risk by rotating to cash and/or hedging. 

You can read the article Eating Pie Will Keep You on the Treadmill.pdf. 

Ps. The "Lehman Brothers Aggregate Bond Index" is now called the Barclay's Aggregate Bond Index since Lehman Brothers failed.