2012 does not look like to be much less challenging for investors. European recession has been added to the debt crisis, huge Japanese debt, Chinese threat of hard landing, the U.S. recession not completely ruled out, elevated geopolitical changes with o lot of countries facing leadership changes, Iran/Middle East issues – this is a lineup of major risks being watched and reflected by the markets, and they are not going to disappear soon. An average investor can hide in safe assets like high quality U.S. bonds and defensive stocks (as he is, and perhaps should be doing). Having a system and a disciplined approach to investments is key to navigate these markets. Marathon Investor offers a primer on adaptive asset allocation without spending much time on analyzing the challenges of the world economy. Risk management, long-term asset class valuation and relative strength are the inputs to MI decision framework. It does not abandon the concept of strategic asset allocation (which many confuse with static!) and market efficiency, which gives a natural bias to the market (lazy) portfolio in a normal environment. MI is not seeing such however. Massive deleveraging and markets' distortion by the central banks and the governments present a different and a rare environment, so pure lazyness is not justified yet. Thanks for staying with me, and good luck in 2012!