I’ve posted Entry #366 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Investors Who Lower Their Return Expectations At Times of High Valuations Should Lower Allocations Too.
Juicy Excerpt: Bogle stated on Page 33 of his book Common Sense on Mutual Funds that: “This analysis takes into account my conviction both that the performance of individual securities is unpredictable, and that the performance of portfolios of securities is unpredictable on any short-term basis. While the long-term performance of portfolios is also unpredictable, a careful examination of the past returns can establish some probabilities about the prospective parameters of return, offering intelligent investors a basis for rational expectations about future returns.”
That’s not Buy-and-Hold! That’s Valuation-Informed Indexing!