The year and the decade are nearly over. This calendrical conclusion inspires looking back and considering what might have been vs. what actually happened. Some are already calling the last 10 years a lost decade. But that’s misleading. Only investors who made big, risky bets suffered a lost decade. Despite what you may read elsewhere, broad asset allocation across the major asset classes delivered a modest gain. It wasn’t stellar, even by broadly diversified investing’s standards. But a lost decade? Hardly.

True, U.S. stocks didn’t have a good run over the past 10 years. The Russell 3000 Index, for instance, is off by around 1.6% a year for the decade through the end of last month. That’s an usually poor performance by historical standards. It wasn’t much better for equities in the developed world either. The MSCI EAFE Index managed to avoid losing ground during the last 10 years, but just barely.

Meantime, owning a broad portfolio of asset classes did much better. As I’ll discuss in more detail in an upcoming issue of The Beta Investment Report, a passively allocated mix of all the major asset classes earned an annualized 5.1% total return for the decade through November 30, 2010, based on my proprietary Global Market Index (GMI). If you mechanically rebalanced GMI every December 31, the return rose to 6.0% a year.

Surprising? No, not really. The range of annualized returns for the major asset classes—as usual—is all over the map for the trailing 10 years, ranging from the slightly negative result for U.S. stocks up to 18% for equities in emerging markets. That’s not going to change for the next 10 years, although figuring out which asset classes will win vs. lose isn’t going to be any easier. That’s one reason for not sticking your financial neck out too far and betting the ranch on one or two asset classes.

This isn’t rocket science. Rather, it’s prudent risk management. Owning a broad array of asset classes and opportunistically rebalancing the pieces from time to time are the first line of defense in a world where uncertainty reigns supreme and forecasting suffers the usual failure rates.