Asset allocation, the idea that the most successful investment strategy is to diversify across asset classes, has been discredited.

That’s because during the financial crisis last year, nearly all financial markets fell at once. So investors with diversified portfolios lost money in almost every area, except Treasuries and cash.

"Asset allocation did not work. Everything went into the abyss, " Carl Mahler, a financial adviser at Raymond James told a conference covered by The Wall Street Journal.

Many investors view last year as the exception. How often does the worst financial crisis in 70 years come along?

"Diversification didn't fail in the recent market downturn. It worked, just to a lesser degree," according to a Fidelity Investments report cited by The Journal.

But some others say the asset allocation strategy is suffering long-term ills.

"You were increasingly seeing a breakdown" of perceived relationships between asset classes, Mohamed El-Erian, CEO of money manager Pimco, told The Journal. "And that was way before the latest phase in the markets, which accentuated the problems."

He and others say investors must consider how changes in the global economy and financial innovations have altered those relationships.

Some experts say the idea of “buy and hold,” a major element of some asset allocation strategies, is fatally flawed.

Buy-and-hold investing was "basically foisted on investors by an industry that wanted to keep assets under management," Investor Insight head John Mauldin told the Financial Times.