The owner of the Monevator blog yesterday banned honest posting on the flaws of the Buy-and-Hold Model.
I put a comment to a blog entry there entitled U.S. Historical Asset Class Returns. Here are the words of my comment:
“Stocks tend to outpace other asset classes over the medium to long-term, but if you buy them at the end of a bubble period such as 1999 or 1929, you’re unlikely to do very well.
“The obvious question is — Why do the “experts” not tell people this at the time, when it could do them some good? Why were Bogle and Buffett and Bernstein and all these others not warning us to lower our stock allocations when prices were so high that the odds of achieving good long-term results were dismal?
“The obvious answer is that the “experts” are compromised. They make a living by selling stocks and you don’t sell stocks by telling people that stocks offer a horrible long-term value proposition at current prices.
“This needs to change if we are to get out of this economic crisis. The internet is not owned by The Stock Selling Industry. If personal finance bloggers would come to see it as their job to report the realities of stock investing, all this crazy volatility would come to an end. People would learn to only invest in stocks when prices are reasonable and therefore prices could never rise to unreasonable levels again.
“It’s all so easy and so hard both at the same time. It would be the greatest advance in investing ever achieved. But it would also be the greatest upset to the status quo we have ever seen. It would be a tiny step forward in logic and a huge step forward in terms of the results that we all could obtain from our investing dollars.”
The owner of the blog responded with a comment saying:
“Rob Bennett – I have deleted your comment and my patience has finally run out on allowing you to post your opinions about conspiracy in the markets on my blog.
“Your comments are misleading and dangerous, and I don’t spend 3-4 hours writing articles to have you append your mantra at the end of every post.
“There is no conspiracy about valuation in the stock market. This very article mentions valuation…. Everyone knows about valuation. It is discussed non-stop….Read The Intelligent Investor by Benjamin Graham, which also discusses over and undervalued markets, and the dangers of the former, and thus why it is desirable to invest in the latter…. Enough is enough.”
I responded with a comment saying:
“Then read The Intelligent Investor by Benjamin Graham, which also discusses over and undervalued markets, and the dangers of the former, and thus why it is desirable to invest in the latter.
“And yet there are many who advocate Buy-and-Hold Investing (failing to adjust your stock allocation in response to big price swings) to this day, Monevator. Why? For what purpose?”
This comment was deleted within minutes of the time I posted it.