I’ve posted Entry #303 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called It’s a Mistake to Avoid the Risk of Stocks But It’s Also a Mistake to Fail to Mitigate that Risk by Exercising Price Discipline.
Juicy Excerpt: Please note how the change from a 20-percent stock allocation to a 50-percent stock allocation brought on gains of about $100,000 and the change from a 50-percent stock allocation to an 80-percent stock allocation brought on gains of about $100,000 while the change from a fixed 80-percent stock allocation to a valuation-adjusted allocation brought on gains of almost $150,000. Increasing one’s stock allocation is a big plus in the long run. But switching from a Buy-and-Hold approach to a valuation-informed approach is an even bigger plus. The same general pattern applied in the first run but in that case the relative benefit that resulted from increasing one’s stock allocation was greater and the benefit from going to a varying allocation was less.
Rob says
I mistakenly put up the same blog entry twice, as yesterday’s entry and as today’s entry. Anonymous (one of my Buy-and-Hold Goon friends) pointed this out in a comment. So I substituted the entry above as today’s entry.
Unfortunately, deletion of the mistake blog entry automatically deleted Anonymous’ helpful comment. I wanted to let all know how he took time out of his day to help us out here. Thanks for the assist, Anonymous! For a Goon, sometimes you are not so awful!
Rob
Anonymous says
How is this person a goon?
Rob says
He smells bad, for one thing.
That’s always a dead giveaway.
You need to pay closer attention, old friend.
Rob
Anonymous says
Then you must be a goon, Rob.
Rob says
Friend!
Comrade!
Rob