Set forth below are the texts of two comment that I recently put to another blog entry at this site:
I just wanted to confirm with you that asset allocation, and whether one prefers to vary it with valuations, is a personal matter with no right or wrong answer. We make take differing views, but there’s no need to be dogmatic about them.
Dogmatism hurts us.
There are two schools of thought. One is rooted in the research of Eugene Fama. One is rooted in the research of Robert Shiller. Both Fama and Shiller have been award Nobel Prizes in Economics for their work.
Members of both schools should respect members of the other school.
But there ARE right and wrong answers. We should avoid dogmatism because none of us know with certainty which school of thought is the right one. But it is not possible that both schools of though are equally correct. The two schools of thought are rooted in opposite premises.
We don’t know everything. That’s why we should avoid dogmatism.
But we DO know some things. So it would be a terrible mistake to pretend that this is all just a matter of personal choice, that every allocation choice is equally supported by the peer-reviewed research in this field.
You are suggesting that only two extreme positions exist: Either everything is known and there is no room for judgment calls or nothing is known and every choice made is equally supported by the research. I reject both extremes and favor a middle-ground position. We have learned many important things about how stock investing works over the past 50 years and we should hope and expect to continue learning in days to come. We should be happy about what we have learned and we should share what we have learned with as many people as possible. But we should never become so full of ourselves as to imagine that we have learned it all and that there is no room for future learning experiences.
Each investor should make the calls as to how he or she invests. But any advisor who says “every allocation call is equally valid according to the research” is failing to do his job. We should be telling people what the research says in a non-dogmatic fashion. We should tell people what the research reveals and what the research does not reveal and then leave it to them as to what allocation choice to make.
If someone were to say “I am going to go with zero stocks at all times,” I would say that that position is not supported by the research. But I certainly would remain friends with that person. I certainly would see no call to be abusive in any way to that person. Perhaps I have misunderstood the research or perhaps there will be new research supporting that person’s view in coming days. I cannot in good conscience endorse a permanent stock allocation of zero given what I know about what the research says. But I respect the right and responsibility of all investors to make their own calls and I would never think of dogmatically insisting that any investor follow my recommendations.
I am dogmatic about my right (and the right of every one of my fellow community members) to post honestly. But that’s as far as the dogmatism goes. It would be a lie for me to say that the numbers in the Old School SWR studies are accurate and I would never dream of doing such a thing. But I certainly have been friends with many people who use those studies for guidance and I certainly respect and like those people.
Does that answer your question, Anonymous?
I think you’ve got it, Rob. Now see if you can put this new attitude into practice – create an account at Bogleheads and contribute to a few threads on this topic.
Remember, no dogmatism, no off topic rants, no thread hijacking, no bullying, just, to quote you:
We should be telling people what the research says in a non-dogmatic fashion. We should tell people what the research reveals and what the research does not reveal and then leave it to them as to what allocation choice to make.
Dozens of people are able to do that on Bogleheads, so I don’t think it’s beyond your ability if you try.
I’ll give it a shot, Anonymous.
Note: Within 10 minutes of advancing this post, I registered at the Bogleheads Forum as “RobBennett” and put a post to the tread titled “Retirement Calculator”:
My post read:
A link to The Retirement Risk Evaluator is set forth below. The unique thing about this retirement calculator is that it contains an adjustment to reflect the valuation level that applies at the time the retirement begins:
A note appeared on my screen saying that the comment was in moderation. This was at about 5:00 PM Eastern Time on May 31, 2014. As of the time that I am scheduling this blog entry for future posting (5:00 PM Eastern Time on June 2, 2014), I have not heard any word re the status of the comment.
I wonder why not.