MPT is an investment strategy for an Organic Growth Phase

It's a losing strategy for an evolutionary Phase

The components are fixed income, cash, and equity no matter how you boil it down.

It is the equity component that needs to be restructured the "risk" portion the  "Risk Trade". In MPT the risk/reward is out of balance......on the equity side, there is no way for it to adapt to structural Change....It is reactive in nature, backward looking, when it comes to investing this is wrong. In fixed income investing you move to the highest yield (price).. In equity investing you move to opportunity not price..Price is often an Illusion of Value. Equity investing requires a proactive process and notion of the future.

Asset backed securities are not pure income vechicles that is where things went wrong there is and equity component to that. You lose your principal when the cash flow stops and there was no equity buffer between the renenus and the principal, Alan GreenSpan

MPT is limited in it's ability to adapt. It cannot adapt to all market conditions. It is to simplistis and only wirls in a bell jar. Under certain ASSUMPTIONS - which a not reality.