Jon Stewart torched Jim Cramer live on TV, but did he do more harm than good by slamming long-term investing as well?

For anyone who didn't catch it on March 12, comedian Jon Stewart put to shame many hard-nosed financial journalists when he caught CNBC's Jim Cramer in outright lies about his scamming ways running hedge funds.

Stewart, host of Comedy Central's "The Daily Show," also blasted Cramer for his less-than-substantive antics on CNBC's "Mad Money" show. 

We should all stand up and applaud Stewart's performance. But he took it too far when talking about how his elderly mother had bought into the industry's long-term investing mantra.

Stewart should've stayed on-topic, drilling Cramer and not letting him off the hot seat. Instead, he ventured too far afield when relating the apparent drubbing his mom took in the markets during the ongoing recession.

Although ex-journalist Cramer is the sort of slumdog millionaire we all should be wary of taking too seriously, he could've redeemed himself a smidgen by pointing out to Stewart that long-term investing shouldn't take the rap.

My Parents ... And The Importance Of Sound Advice

Sitting by the computer watching on Comedy Central's site the next day (see clip here), I couldn't help thinking about my parents. They're both around the same age as Stewart's mom, and while their portfolio has taken a hit as a result of this economic mess, it's still nowhere near a double-digit loss.

As some of you might remember, there was a lengthy review on IU.com's discussion boards a while ago about whether my parents should dump their (unnamed) adviser, who was unresponsive to requests for information about their allocation plan. To make a long story short, most pros and amateurs alike agreed that an unresponsive and overaggressive adviser wasn't worth keeping.

So we dropped the adviser and moved their portfolio to Vanguard. Not only did we save thousands of dollars in yearly fees to fund companies, but we also discovered an amazing statistic while hunting through the maze of paperwork and accounts the adviser had set up: My parents, in their mid-80s, had something like 80% of their assets in stocks!

We since have merged their portfolios into an easy-to-manage 70% bond allocation. By the end of last year, that was up to 80% bonds as the stock portion fell and the fixed-income index funds held their ground. With a large portion in munis, the portfolio is doing even better this year.

Back to Jon Stewart. He was correct in pointing out that investing requires monitoring and it's not as easy as it looks. But when he made the leap to condemning long-term planning, he clearly was ranting—and well beyond his comfort zone.

Someone should let Stewart know that long-term asset allocation isn't an industry-inspired plot to hold investment dollars longer. It's an ages-old strategy with a wealth of academic knowledge behind it that savvy veteran investors have long embraced.

It just takes some thought and preparation. How you allocate assets is critical. In fact, the longer-term focus your portfolio takes, the more due diligence is required in terms of making sure you've got the right plan of attack.

Consider if you had a simple two-ETF portfolio. For all domestic equities, let's take the Vanguard Total Stock Index ETF (NYSE: VTI). With bonds, let's go with the iShares Barclays Aggregate Bond ETF (NYSE: AGG).

The table below shows how asset allocation impacts this simple portfolio's returns on a percentage basis, both over the short and longer term (through 3/17/09):