Set forth below is the text of a comment that I posted to the discussion thread for another blog entry at this site:
So, you have seen what holdings I have in my Vanguard account to make such an assessment.
It’s not as if you are better off if you have an account that is not representative of the market as a whole. If you have a non-representative portfolio, it is possible that your numbers are slightly better. But it is EQUALLY possible that your numbers are slightly WORSE. In other words, having e non-representative portfolio increases risk. Not generally considered a good thing,.
The biggie is whether you are taking the last 36 years of peer-reviewed research into consideration by dividing by two or whether you have been taken in by the smelly Buy-and-Hold garbage and are fooling yourself into thinking that your portfolio numbers offer a reasonably good assessment of the true and lasting value of your portfolio. If you have fallen for the smelly Buy-and-Hold garbage, you cannot engage in effective financial planning. To engage in effective financial planning, you need to get the numbers at least roughly right.
These are my sincere thoughts re these terribly important matters, Anonymous. Buy-and-Hold/Get Rich Quick is not my particular cup of tea. I am a peer-reviewed research/common sense kind of guy. Sue me, you know?
But I course wish you all the best that this life has to offer a person all the same, my good friend. I am 100 percent sure re that one.
Please take good care, man.
Rob
I guess I will have to wipe away my tears with $100 bills.
$100 bills that have a real, lasting value of $50, according to the last 36 years of peer-reviewed research in this field.
Rob
It is good thing I didn’t follow your opinion of what the research says. Otherwise, I would have a small fraction of what I have today.
That’s not so, Anonymous.
That amount by which you would be ahead differs according to when you started investing and how much you had to invest in various years. But even in a worst-case scenario, Valuation-Informed Indexing would have put you slightly ahead on a risk-adjusted basis and only a little big behind on a non-risk-adjusted basis. And if you divide your current stock portfolio balance by two as you need to to reflect today’s level of overvaluation, VII would put you FAR ahead as of today.
The human is the rationalizing animal. Those who believe that the last 36 years of peer-reviewed research is legitimate are able to see how much good it has done them to follow it. Those who are not able to accept the message of the last 36 years of peer-reviewed research are able to come up with rationalizations for believing that it might not have worked for them.
None of those rationalizations can survive civil and reasoned debate. That’s why we have seen death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs. You don’t see that sort of thing from people engaged in a search for truth. You see that sort of thing from people seeking to work a con (in this case, on themselves as well as on others).
That’s my sincere take re these terribly important matters, in any event.
Rob
No, Rob. If I followed you, It would have been a financial disaster. It is not even close. We have all seen it play out.
Okay, Anonymous.
I do wish you all good things, in any event.
Rob
Let’s see. If I retired with $400K like you, would I be better off versus having $4 million now? As you have said, it looks like math is not your thing.
You’d be better off retiring with $40 and not going to prison than you would be retiring with $40 million and going to prison.
That’s my sincere take re this terribly important matter, in any event.
Rob
The prison thing is just silly. Try acting more like an adult.
I don’t think it is even a tiny bit silly, Anonymous. I think it is tragic. I don’t think it is silly.
It is the adult thing to speak up about criminal acts when one sees them. It is because too many of us failed to speak up about your acts as they moved into the criminal realm that you are in the mess that you are in today. We all should have been adults and helped you out by bringing the problematic behavior to a quick stop. Lots of us failed to do that, for various reasons. And here we are.
I am trying to get your prison sentence reduced to the extent that there are opportunities available to me to do that. I sure cannot do that if I pretend that I think there is something silly about you going to prison. There’s nothing at all silly about it. It is a problem that we all should be working together to solve.
My take.
Rob