The admonition that we should all think of ourselves and our investments in a very broad fashion including our own ability to make money (termed human capital) and how we do it is one idea I am finding to be extremely helpful. Not long ago, blogger Michael James had been trying to answer the very good question, "why not have an all-equity portfolio?" since equities outperform fixed income in the long run.
One answer comes in the form of this article For Long Term Investors, the Focus Should Be on Risk by the same Zvi Bodie and Paul Hogan (though it is not part of the book). The answer there boils down to the fact that investment returns are not evenly distributed through time so that an 8% compounded return can have enormously and perhaps disastrously different end values for the investor who puts in (pre-retirement phase) or withdraws (retirement) money each year.
The second answer comes from consideration of one's other sources of income in life. If your job is highly correlated with the stock market, then an all-equity portfolio is extremely dangerous since everything will implode at once. I learned this the hard way by having four and a half years of retirement savings wiped out at the same time I got laid off by Nortel since I had invested the voluntary retirement plan contributions in Nortel stock. On the other hand, someone like my relatives who are in education (job security and completely unrelated to the stock market) with an inflation-indexed, generous defined benefit pension plan should not put a penny into fixed income investments and should put it all in equities. Mind you, then we face the other issue of personal financial planning - the teachers are totally risk averse and don't want to go into equities at all and many of the tech industry workers I know are too keen on equities!