Set forth below are comments that were posted by Azanon to the blog entry titled “Does Shiller Endorse Valuation-Informed Indexing?”:
Sure he does (support value informed indexing). I’ve watch all of the Yale lecture series of his economics class that are available for free on the web, and it is painfully obvious that Shiller endorses the concept of considering valuations, the current “animal spirit”, and the degree of irrational exuberance in place at any given time. He is constantly being interviewed to access the real estate market and its future direction.
If he feels all of these things can be intelligibly accessed, then certainly he would support the idea of making portfolio adjustments based upon market climate, not just upon one’s age or risk tolerance.
Rob, “value informed investing” is not as shunned as I think you believe that it is. I have read 100s of articles during my adult years with topics accessing whether various stocks, sectors, the (U.S.) market in general, or world markets are under or overpriced which often include suggestions to move into or out of the topic of discussion. The concept in general is practiced as least as often as buying-and-holding (in theory).
Outside of theory, true buy-and-holding is EXTREMELY rare. I can’t say that I know a single individual that has maintained a pre-defined buy-and-hold allocation which survived both the 2000 crash and the 2007 crash, without either one of these events compelling them to do something different (in other words, fail at buying and holding).