Pokey paydirt. (Wall Street West).

Sometimes it pays to be a little on the pokey side. Consider the Los Angeles County Retirement Association, the $28 billion pension fund for county employees. For years, investment experts have badgered public pension plans to put 100 percent of their portfolios into equities, which historically have outperformed bonds. (This is a bigger institutional adjustment than many may know; only a generation ago, many public pensions shunned any risk, preferring only AAA-rated bonds, or federal IOUs.)

But LACERA's nine-member investment board is not known for blitzkrieg investment maneuvers. And while inching towards greater exposure to equities in the past 15 years, it still has more than a quarter of its portfolio in bonds.

With the stock market tanking for three years straight and bonds appreciating -- and throwing off yields besides -- suddenly retro looks good.

"Hey, 8 percent returns look great, if you compare them to losing 20 percent on the S&R" said Ken Shaffer, LACERA's chief investment officer. "It's the old lesson: Diversification is good."

Shaffer wondered if a 'crab" market - one that goes mostly sideways - is in the offing. "Maybe it won't be a bull or a bear for several years," he said.

Contributing columnist Benjamin Mark Cole can be reached at [e-mail].