I’ve posted Entry #112 to my weekly Beyond Buy-and-Hold column at the Out of Your Rut site. It’s called Having Too Much Investing Information Is Just As Bad As Having No Investing Information At All.
Juicy Excerpt: Contrast that with the poor investor who put his $100,000 into stocks at a time when the P/E10 value was 32. He has a chance of seeing no gain at all at 5 years out and at 10 years out and even at 15 years out. Going 5 or 10 or 15 years without a gain is discouraging. It is investors who invest in stocks at those sorts of price levels who end up selling and thus never realize the long-term gains for which stocks have become famous.
At 30 years out, this investor is likely to have seen his $100,000 turned into $400,000. But that’s after sweating through lots of years of losses or small gains. And that $400,000 doesn’t compare to the $900,000 value that applies for the investor who made his investment at a time of low valuations. The best result for the high-valuations investor is a portfolio value of $600,000, half of the best-possible portfolio value that applies for the low-valuation investor.