Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“I wouldn’t assume rationality. I wouldn’t be my retirement on a belief that that $2,600 price is legitimate.”
But you really have no idea. Nor does anyone else. With hindsight, of course, it will be obvious. Just like Beanie Babies, stocks in 2000, etc.
Take away the hindsight – like when you made that 3 year stock return guess a few years ago – and you quickly learn just how predictable markets actually are.
The stock market is highly unpredictable in the short term. Fama showed that. And the stock market is highly predictable in the long term. Shiller showed that.”
Buy-and-Hold is the investing strategy you get when you take the pre-1981 peer-reviewed research into consideration. Valuation-Informed Indexing is what you get when you take both the pre-1981 peer-reviewed research and the post-1981 peer-reviewed research into consideration.
You are free to conclude that the post-1981 research is not legitimate research.
I am free to conclude that the post-1981 research is legitimate.
I am going to continue to post my sincere views on safe withdrawal rates and scores of other critically important investment-related topics.
I hope that works for you, my long-time abusive-posting Buy-and-Hold-defending friend.