In Tuesday's huge bounce, most of the market segments that had been crushed were leaders to the upside.

Contributing to the gain was the overselling in sectors such as commodities, foreign currencies, mining stocks, foreign stocks and energy stocks. No shock there. If the jump turns into a bear market rally (or as I like to call them, "feel-good rallies") that lasts for a month or two, the increase in these segments could be massive.

Many people, as often happens during big declines, probably learned that they had too much exposure to all of these segments. They worked great for years on the upside. Maybe as a function of not rebalancing or something else, the declines really hurt people. If you are wearing these shoes and had some real worry, it probably makes sense to lay out a plan to reduce exposure if there is a prolonged rally.

None of these asset classes are permanently broken, but real stock-price recovery could take a long time. Regardless of how long that takes, they will have scary declines in the future.

I am all for having exposure to the market segments mentioned above, but just as having no exposure is a big bet, so too is having too much exposure. All sorts of academic papers make a compelling case for holding 15% to 20% in commodities. I can't out-debate volumes of academic research, but 20% seems crazy to me. Plenty of people make the case for a large portion in emerging markets, on the basis of that segment's share of global GDP. Again, it is valid but more than I want.

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