Valuation-Informed Indexing #163 — All of Today’s Investment Advisors Need to Warn Their Clients That Their Advice May Be Wildly Off Base

I have posted Entry # 163 to my weekly Valuation-Informed Indexing column at the Value Walk site. It is called All of Today’s Investment Advisors Need to Warn Their Clients That Their Advice May Be Wildly Off Base.

Juicy Excerpt: So the right way to handle things is to say: “I believe that the best allocation for someone in your circumstances is 80 percent but I have to add that there are good and smart people out there who believe just as strongly and with research every bit as serious backing up their belief that 20 percent is the better choice.” The Valuation-Informed Indexers need to say it the other way around, of course.

It’s not a super message from a marketing standpoint. Investors don’t want to hear a wishy washy message. They pay experts to tell them what to do. They view an expert who fails to take a stand as an expert who is not doing his or her job.

So all investing professionals need to take a stand. We all need to be saying “I believe that 80 percent is best and that the research supports me on that point” or “I believe that 20 percent is best and that the research supports me on that point.”

The idea here is that we ALSO need to note that there is another strongly held viewpoint out there that is every bit as legitimate (at least in the eyes of some). It’s wrong to fail to mention that. Investors need to know that the research is not settled, that a respected economics professor has raised a challenge to the premises of the now-dominant model and that that challenge has not been effectively countered in over three decades.


  1. The Pink Unicorn says

    Have you warned your readers that you have been wildly off base about your stock market crash predictions and that you have been wildly off about your own retirement assumptions?

  2. Rob says

    I have not, Pink.

    What I tell my readers is that Buy-and-Hold is a con. It has never been possible to make short-term predictions. It has ALWAYS been possible to make long-term predictions. I have made many long-term predictions and naturally every single one has proven out. I have obviously never made a short-term prediction.

    I explain to my readers that the Buy-and-Holders have on tens of thousands of occasions engaged in word games to trick people into thinking that is there is some secret research showing that long-term timing (price discipline) might not be required. I have pointed out that Academic Researcher Wade Pfau spent a great deal of time checking out that wild claim and found that there is precisely zero truth to it. Long-term timing has ALWAYS (for 140 years) worked and has ALWAYS (for 140 years) been required.

    I have pointed out that we will be able to bring this economic crisis to a quick end and to bring on the greatest period of economic growth in U.S. history once prison sentences have been announced for you Goons. There are of course reasons why we have made the crime of financial fraud a felony. We need to reward those who post honestly about the last 32 years of peer-reviewed academic research in this field and punish those who engage in death threats and unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs in an effort to block millions of middle-class investors from learning what the academic research in this field really shows.

    My best and warmest wishes to you and yours, Pink.



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