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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