I’ve posted Entry #301 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Most Investing Strategies Perform Differently Over Different Time-Periods.
Juicy Excerpt: Another important feature of the calculator is that it reports results at six time-periods: (1) five years; (2) ten years; (3) fifteen years; (4) twenty years; (5) twenty-five years; and (6) thirty years. Too much of today’s investing commentary is rooted in a belief that one strategy is superior for all time-periods. This is often not the case. A strategy that is likely to work well for five years may be likely to work poorly 20 years out. Investors need to know what long-term risks they are taking on by following a strategy that may well make them happy enough for five or ten years. Some strategies work well at all time-periods but are only a small bit superior in the early years and then become far superior only over a long period of time. Investors are more likely to be able to exercise patience if they know in advance that that is how things are likely to play out.