Advisors may have reason to further reassess their management style at the end of the year. Lou Stanasolovich, president and CEO of Legend Financial Advisors in Pittsburgh, says his firm's "lower volatility" strategy-a branded management style that seeks "equity-like returns with bond-like risk"-was able to keep losses to an average of about 14% for the firm's clients in 2008.

Advisors who weren't so fortunate following classic modern portfolio theory may find out how clients really feel about their approach in January or February, he says. "That's when clients look at their yearly returns," Stanasolovich says. "It's the day of reckoning."

As Stocks Sink, An 'I Told You So'
If you're a maverick who has spent years warning advisors and individual investors about the dangers of the stock market and mutual funds, now would be just the right time to gloat.

Zvi Bodie, however, isn't kidding himself.

Even with the stunning collapse of the stock market in late 2008, he realizes that equities will probably continue to be the mainstay of the nation's retirement planning industry.

"I would say that some people will never wake up," says Bodie, the Norman and Adele Barron Professor of Management at Boston University.

"It's like those folks who keep rebuilding on the shore every time the house is blown over and they say, 'Well, it's a once-in-100-years storm.' Then ten years later it happens again," he says. "The point is, it's unpredictable and that's what we mean by risk."

The argument Bodie makes in his speeches and in his book, Worry Free Investing, is that mutual funds, advisors and the rest of the retirement planning industry have created the false impression that long-term stock investments are a safe play for individual investors.

Bodie maintains stocks are in fact a big gamble for the typical investor, even over the long run.

The danger of stocks is borne out by mathematics, which shows that the chance of sustaining a severe loss on stocks increases the longer you hold them, Bodie says.

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