I’ve posted Entry #80 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called We Have Forgotten the Purpose of Investment Research.
Juicy Excerpt: An entire industry has been built up to promote Buy-and-Hold. Thousands of books have been written. Hundreds of calculators have been developed. Millions in marketing dollars have been directed to the promotion of this model. Many people in the field hate to think about how big a job we have in front of us once we openly acknowledge that the model has been discredited by 30 years of academic research.
Still, the purpose of investment research is to help people become successful investors. That means that we mustcorrect retirement studies that get the numbers wildly wrong. Studies that get the numbers wildly wrong do not serve the purpose for which investment research is conducted. They undermine that purpose. As millions of middle-class people suffer failed retirements, more and more investors will lose confidence not only in the investment research that has long been discredited but in all investment research.