That doesn't mean Key is altering their asset allocation advice though.
Professor Siegel, author of "Stocks for the Long Run" (Third Edition, McGraw-Hill, 2002), said long-term investors should not alter their asset allocations or specific stock selections one bit.
JEFF TJORNEHOJ, research manager at Lipper, compared absolute-return funds with balanced funds that alter their asset allocations to exploit movements in markets, an approach that was more common a generation ago.
If, instead, they cash in bonds and certificates of deposit, and then invest the proceeds in taxable bonds in a 529, they haven't altered their overall asset allocation, but have improved their tax situation.
But it has not altered his view on asset allocation, and his investment philosophy remains intact: Don't take more risk than you need to achieve your financial goals, and calibrate those needs with what your stomach can handle.
Harvard tries not to vary its asset allocation.
Another typical error is not reviewing that diversification or asset allocation as circumstance change.
If you have an asset allocation strategy based on a sound financial plan and nothing has changed in your personal life to alter the time horizon, then stick to your strategy.
An example of the effect: Investors who are restricted from changing the asset allocation in their retirement plans more than a few times a year tend to be more heavily invested in equities than those who can alter it daily.
Your asset allocation should reflect your goals.
What's the right asset allocation?
