The Juggling Dynamite blog recently liked to my article on the threats used to intimidate Academic Researcher Wade Pfau into not publishing further research on the dangers of Buy-and-Hold investing strategies.
Danielle Park wrote: “For all the many people who are still holding equities at present levels because their financial adviser insists that timing market cycles is impossible to do. Please awaken from your marketing-induced slumber and read this: Academic Researcher silenced by threats to get him fired from his job after showing dangers of buy-and hold investing strategies.
Juicy Excerpt: This article exposes the cover-up. It shows how the academic researchers in this field are pressured to perform only research that helps the industry big shots and to refrain from doing research that would help millions to invest more effectively when publishing such research would undermine the industry’s most cherished marketing slogans (the phrase “timing never works” has been repeated so many times that millions of investors assume that there MUST be research supporting the claim).
The public policy implications are huge. In ordinary circumstances, stock-market prices are self-regulating. When prices get high, the long-term value proposition of owning stocks drops. That should cause investors to sell and the sales should bring prices back to fair-value levels. The relentless promotion of Buy-and-Hold strategies made the market dysfunctional. Stock were overpriced by $12 trillion in 2000. Prices always return to fair-value levels over the course of about 10 years. So we knew in 2000 that consumers were going to lose about $12 trillion in buying power by the end of the first decade of the 21st Century. There’s your economic crisis!