I’ve posted Entry #373 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called It’s Logically Inconsistent to Buy Stocks in Response to Valuation Shifts But to Rule Out Selling Them for That Reason.
Juicy Excerpt: I think that the biggest cause of the problem is an unfortunate marketing reality: there’s generally more money to be made selling stocks than there is to be made selling the safe asset classes that investors should be buying into when stock prices rise to dangerous levels. Most of the people who are promoted as “experts” in this field are compromised by their need to push stocks for a living. In some cases, they appreciate the benefits that investors could reap by lowering their stock allocations but hesitate to give voice to them. In other cases, they themselves are taken in by the pro-stock commentary that becomes ubiquitous at times of high stock prices (it is an excess of pro-stock commentary that causes the high stock prices!) and cannot even appreciate the case for a lowering of stock allocations at such times.