I’ve posted Entry #61 to my weekly Beyond Buy-and-Hold column at the Out of Your Rut site. It’s called Investing Is Not a Zero-Sum Game.
Juicy Excerpt: How do you think these bull market fantasies affected the spending decisions of millions of investors?
It caused them to spend far more on high-priced homes and cars and vacations than they would have spent had they possessed an accurate understanding of how much wealth they possessed. That is, it caused companies that built and sold McMansions to become far more successful than they would have been had the market been functioning properly and it caused companies that built and sold well-priced homes to become far less successful than they would have been had the market been functioning properly.
Buy-and-Hold destroys wealth by taking profits that should be going to companies doing a good job of serving customer needs and allocating it instead to companies doing a poor job of serving customer needs. It does this for many years running and on a widespread scale. Allowed to continue long enough, the bull markets created by the promotion of Buy-and-Hold strategies bring a free market economy to its knees.