Did "buy and hold" ever exist? According to Norm Mindel, veteran financial planner and author of the new book Wealth Management in the New Economy, it was merely a myth painted by the old economy -- along with the belief that stockbrokers could make you rich.

"Let's dispel that myth," Mindel told me in a recent interview. "Let's define what buy and hold means. There used to be something called the Nifty 50. These were the 50 stocks you should hold, and among the names were Eastman Kodak (NYSE: EK) and Polaroid. So the idea of holding a portfolio of stocks never really worked."

Mindel believes in efficient markets, and thus, that hiring brokers to protect you and predict the stock market is a waste of time. "The notion that we're going to keep pursuing these really smart guys to get the secret sauce is a myth," he said. "It just didn't work." He says the best evidence of that is that most of the major Wall Street firms like Morgan Stanley (NYSE: MS) and Citigroup (NYSE: C) couldn't even protect themselves. "People lost massive amounts of money."

"Massive" diversification
Three key lessons from what Mindel calls the "new economy" -- that is, post-2008 meltdown -- are massive diversification, a good asset-allocation policy, and being smart when it comes to investing in bonds. "The best protection to minimize risk if you want to capture the stock market returns is massive diversification," Mindel says.

In Mindel's approach, a typical client's portfolio has exposure to roughly 10,000 stocks in 40 countries. This way, Mindel maintains that if a couple companies or sectors go down, the investor's portfolio isn't pulverized.

But the differentiating factor of Mindel's strategy is that he doesn't invest in individual stocks. He invests in asset classes -- 13, to be exact, ranging from small caps to REITs. Mindel believes that "picking stocks is like throwing darts, and in my world it's like gambling. In 25 years of investing I haven't seen a person who said, 'My stockbroker made me rich.'"

Mindel attributes this to efficient market theory -- the idea that one can't beat the market, because stock prices reflect all available information -- though he admits there are exceptions to the rule, like Warren Buffett. "There's probably virtually no mispricing on what General Electric (NYSE: GE) is worth today and what Ford's (NYSE: F) worth today. Everyone has access to the same information. So efficient market theory says, if we all have access to the same information, then how will you buy at a better price than me?"

EAGR for retirement
When it comes to investing for your retirement, Mindel follows a four-step method he calls the EAGR approach:

  • Emergency
  • Annual income
  • Growth
  • Risk protection

Perhaps the most important feature of the EAGR approach is its focus on managing risk. In particular, protecting against "point in time risk," as well as the risk of outliving your money is paramount.

To illustrate point in time risk, consider what happens if the time in which you want to retire turns out to be horrible; say, the crash of 2008, or the Internet bubble of 2000. To protect yourself from this danger, Mindel recommends keeping a substantial amount of emergency money -- enough to live on for as long as three years -- in liquid, readily accessible money market accounts. "If the markets go in the tank when you want to retire, you don't need that money for the next three years," he said. "It's a rainy-day fund to deal with point-in-time risk." In addition, he recommends keeping another seven to eight years' worth of living expenses in bonds.

Many people have trouble saving enough to ensure that they won't live too long and end up running out of money. For some, Mindel suggests considering annuities. He cautions that annuities can be are expensive, complicated, and sometimes misused. But in certain situations, Mindel says that it makes sense to look at annuities with guaranteed income benefits that promise a certain amount of income in 15 to 20 years.

The "new economy" certainly has many investors rethinking how they plan to save for retirement. Following Mindel's broad diversification strategy and EAGR approach is one framework for ensuring you'll have enough for your golden years.

Do you think capturing the market's gains through asset classes is a better bet than individual stocks? Weigh in below!

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Fool contributor Jennifer Schonberger does not own shares of any of the companies mentioned in this article. You can follow her on Twitter. Ford is a Motley Fool Stock Advisor pick. The Motley Fool has a disclosure policy.