I recently started a thread at the Early Retirement Extreme Forum titled Risk Revisited.
Juicy Excerpt #1: I view the attitude toward risk that Kevin is describing (he is accurately describing the Buy-and-Hold approach) as exceedingly dangerous. In all other areas of life endeavor, we think of risk as something to be avoided. When it comes to investing, we think of risk as something to be sought out. I believe that this is why we are in an economic crisis today. We have taught millions of middle-class people to seek out risk and the result is that we have collectively taken on so much excessive risk that the losses have become big enough to crater the entire economy. We need to rethink this risk question!
Juicy Excerpt #2: But then Bernstein spends the rest of the book showing how it was impossible to win by purchasing individual stocks or to time the market and that the best way to invest is to buy and hold in specific asset allocations. So, in other words, even as he said the market appeared to be priced way too high, still the best thing to do was to buy into it.
Juicy Excerpt #3: I believe that we are working our way through an elaborate social dance. How do we get to the point where it becomes possible to say openly that we all goofed up? I believe that once we get that part of the job out of the way, the rest is going to come easy.