I’ve posted Entry #59 to my weekly Investing: The New Rules column at the Death by 1,000 Papercuts site. It’s called Dangers of Valuation-Informed Indexing.
Juicy Excerpt: Prior to 1981, the academic research really did support Buy-and-Hold. There are now 30 years of research discrediting Buy-and-Hold and supporting Valuation-Informed Indexing. There’s one sense in which 30 years of research is a lot; stock investing has been the subject of sustained academic study for only about 50 years. But in the grand scheme of things 30 years of research is not enough research to draw definite conclusions. Buy-and-Hold was discredited within a decade of when it was popularized in 1974 by the publication of the book A Random Walk Down Wall Street. It is possible that future research will discredit Valuation-Informed Indexing.