Asset Allocation Puzzle?

What are the main arguments of Canner, Mankiw and Weil’s "An Asset Allocation Puzzle? That is, why are investment advices inconsistent with Mutual fund theorem?

Basically, traditional investment advice ignores the impact of equity diversification on the reduction of risk. Correlation and volatility are persistent qualities of most well-managed mutual funds. Thus, the right mix of equity funds could be less volatile, and have more return, than a mix of bond and equity funds.

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