The efficient frontier works ... in the long run.

Wonderful post by Cliff Asness that shows in the short run the basic tenets of risk and return seem to get all jumbled up (bonds earning more than stocks, etc), but in the long run it all works out.

That's the point.   In the long run it all works out.   Trashing finance theories because they didn't work this week is stupid.  As is basing asset allocation decisions on short term performance and market conditions.  

Here's the conclusion it all of its finance theory supporting beauty.