Risky Business

Failure of Fail Safe

The premise of asset allocation is a good starting point but there is academic evidence that it fails when you need it the most. When volatility increases, asset correlations increase, which runs counter to the purpose of asset allocation. No one complained in '99 or '06. Once volatility returns to normalcy, AA works. So I agree with you, money managers should focus on managing money and not be focused solely on collecting their fees.