But the partner at Brinton Eaton Wealth Advisors in Morristown, N.J., characterizes himself as somewhere in between buy-and-hold and more active investing.

"We're asset allocators who look at long-term issues for our clients," Miccolis said.

Each year, Brinton Eaton reevaluates expected returns looking forward about five years for different asset classes. Its staff also tests correlations along with a variety of risk-and-return characteristics. "We come up with 15 different buckets, which are an asset class," Miccolis said. "Each of our portfolios represents a specific allocation to those buckets."

At the end of 2007, Brinton Eaton shifted its allocations generally away from domestic and more toward international. Within foreign stocks, Miccolis says his clients moved a bit from large-cap emerging markets and more toward small-cap international stocks. "They may be in emerging markets, but the emphasis is on cap size rather than geography," he noted.

For small-cap international exposure, Miccolis prefers SPDR S&P International Small Cap (AMEX: GWX). He says it's more diverse than most other rivals, is reasonably priced and tracks an index less correlated to U.S. markets than an ETF such as iShares MSCI EAFE Small Cap Index (NYSE: SCZ). "The S&P index is the one we want to own in international small-caps," said Miccolis.

In the U.S., his firm has shifted out of small-cap stocks into mid-caps and large-cap ETFs. That switch has been ongoing for more than a year. "We're going in the opposite direction in terms of cap sizes in the U.S. from overseas," Miccolis said.

Lately, Brinton Eaton's allocations have tilted away from U.S. real estate investment trusts and more toward foreign markets. In foreign real estate, Miccolis favors SPDR DJ Wilshire International Real Estate (AMEX: RWX).

The firm has also been expanding portfolios into timber. Miccolis says he's eyeing Claymore/Clear Global Timber Index (AMEX: CUT). We've always liked timber, and it's a nice commodities play," he said. "Even if the demand for lumber is light in any given year, the tree just stays in the ground and gets bigger. So it's a good recessionary hedge."

Miccolis stresses that such moves are gradual and come around once to three times a year. Sometimes, no shifts will be necessary.

Along with the firm's 16-member staff, Miccolis says he's a stickler for making sure each of his customers have detailed strategic allocation plans. Those are reviewed on a regular basis. "Each portfolio is reviewed daily against the target allocations to see if they've drifted," Miccolis said.

With each individual plan, a band is determined for how much drift will be tolerated, he added. "The bands are typically within 1-2.5 percentage points of the target," said Miccolis. "If they drift above or below those amounts, our computers will alert us to which portfolios might need attention. Then we might rebalance manually."

Each situation is different, he notes. The firm avoids round-trip trades that could trigger more taxes and penalties for trading. "A typical portfolio might need rebalancing anywhere from one to three times a year," Miccolis said. "That's why we're not strict buy-and-hold investors."

Brinton Eaton doesn't believe in market timing, he added. "We like ETFs for several reasons and they largely don't have anything to do with trading flexibility."

Miccolis likes ETFs to provide instant diversification to the firm's 15 possible buckets it breaks investments into. "If we want to put some money into the energy bucket, for example, we can buy ETFs for everything from oil drillers to water resources and refiners as well as service providers," Miccolis said.

When rebalancing trades take place, those are usually small in nature. "It's easier to carve up small lots of ETFs than stocks," said Miccolis.

And the firm prefers ETFs compared to mutual funds due to tax efficiencies and lower costs.

"ETFs also provide tax-loss harvesting opportunities," Miccolis said. "Since there's a lot of competition among ETF companies, you can usually find two different funds following the same benchmark."