I posted as Guest Blog Entry at the Married (with Debt) blog yesterday. It’s called The Buy-and-Hold Myth.
Juicy Excerpt: In the used-car market, the price of the car being sold is the result of a battle waged between the car seller and the car buyer. The seller wants a high price. The buyer wants a low one. Each side has to give something or risk seeing the negotiation fall through. The end result of the battle is usually a price that is more or less right. The car-selling market works.
It doesn’t work that way in the stock-selling market.
Have you ever heard anyone cheer low stock prices? The magazines love bull markets. So do the experts. So do the bloggers. So do your friends and neighbors and co-workers. So do you.
So the stock market is not really a market. Or, if it is, it is a very unbalanced market. A market in which everyone is pushing for higher prices. A dysfunctional market.
Juicy Comment #1: Buy and hold is not true for all the scenarios but Buy Intelligently and Hold should hold for most of the scenarios.
Juicy Comment #2: I’ll keep my thoughts to myself because we can just agree to disagree.
Juicy Comment #3: I tend to agree that ‘buy & hold’ is largely an invention of the Wall Street marketing machine rather than a true, science-based strategy. However, telling people to abandon buy & hold without also providing a CONSISTENTLY RELIABLE mechanism for judging when prices are ‘high’ or ‘low’ is rather unhelpful, don’t you think?
Juicy Comment #4: I enjoyed reading your article, and I always think it’s good to read opposing viewpoints on a topic, it gives the reader additional information and provides a new perspective on the issue.
Juicy Comment #5: I think there is a middle ground here, isn’t there?
Juicy Comment #6: This implies that I can’t just invest my money and walk away for 30 years when I retire, this implies that I have to take charge and watch the market and act accordingly. Ugh.
John @ Married (with Debt) says
Thanks so much Rob for agreeing to guest post. I’m a contrarian at heart so I love to make sure outsider opinions get a full debate. I admire your passion and the number of people that get riled up only makes me want to learn more.
Rob says
Thanks for those kind words, John.
If you have given any thought to attending the Financial Bloggers Conference in September, I would love to get together with you for a meal. There’s obviously a cost associated with getting out there and staying at a hotel. But I can tell you that the people who put the event together do a super job and the bloggers are all friendly and it is a lot of fun to get to see what people are like in real life.
In any event, I had a blast responding to the comments at your blog. I live for that sort of thing.
Rob
the truth shall make you free says
Google “Rob Bennett financial”
Rob says
Here’s “rob bennett financial”:
http://www.google.com/search?source=ig&hl=en&rlz=&q=rob+bennett+financial&oq=rob+bennett+financial&aq=f&aqi=g-v5&aql=&gs_l=igoogle.3..0i15l5.84.2380.0.3341.15.9.0.5.5.1.282.995.0j3j2.5.0…0.0.
Here’s Goon Central, the site owned by John Greaney, the fellow who got the numbers wrong in his retirement study and who has been leading the smear campaigns for the past 10 years:
http://www.s152957355.onlinehome.us/cgi-bin/yabb2/YaBB.pl
Here’s “valuation-informed indexing”:
http://www.google.com/search?num=100&hl=en&q=valuation-informed+indexing&oq=valuation-informed+indexing&aq=f&aqi=g1g-v2&aql=&gs_nf=1&gs_l=serp.3..0j0i15l2.118038.126254.0.126873.47.37.0.8.8.5.320.4123.0j10j9j1.21.0.OHiumTDPzRM
Rob
Rob says
Sorry for how ugly that looks.
The links seem to work, though. So I am going to leave it up despite the messiness of it.
Rob