Article on Valuation-Informed Indexing Wins “Editor’s Pick” at Carnival of Passive Investing

A Guest Blog Entry that I wrote for the Free From Broke blog titled “A Better and Less Risky Way to Invest in Stocks” has been awarded the “Editor’s Pick” at the Carnival on Passive Investing.

Here are the words that I posted expressing my gratitude to Jacob, the fellow who runs the carnival:

Yes, thanks much for that editor’s pick on Valuation-Informed Indexing (“A Better and Less RIsky Way to Invest in Stocks”), Jacob. Seeing that makes my day!

I’ll tell you a sort of funny story about it. I saw a tweet on the Carnival of Passive Investing and sent a reply asking if ANTI-Passive Investing articles would be considered. Then I saw another tweet on it and decided to check it out for myself. So I come here and see that not only are they considered but they can win Editor’s Pick! Very cool!

Is Valuation-Informed Indexing pro-passive or anti-passive? It’s something new. It’s passive in that there is no stock picking. But it is anti-passive in that you are reacting against the overall market’s unfortunate inclination to get caught up in Mr. Market’s mood swings.

I don’t care about the semantics stuff. I feel great respect and affection for the people who like passive. So I am happy to be included in that group if people in that group feel it is appropriate. The killer irony of the whole thing is that it was by reading John Bogle’s book that I learned about the importance of valuations and ended up on the path I am on today.

I think it is an interesting definitional question, though. Are you still passive if you believe in changing your allocation percentage once every 8 or 10 years? One argument that this might qualify as “passive” is that John Bogle himself said that he thinks Valuation-Informed Indexing can work (he didn’t go quite so far as to endorse the idea, however).

Anyway, thanks for helping some people to learn about the VII concept. I am grateful.

Rob

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