I have posted Entry #421 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called We Cannot Ignore Valuations Out of a Desire to Keep Investing Advice Simple.
Juicy Excerpt: That’s a total of four allocation changes in 36 years, not much more than one every 10 years. And the benefit would be a portfolio that earned significantly higher returns while facing dramatically reduced risk. Complex? I don’t think so. To my eyes, the more complex strategy is the Buy-and-Hold strategy. Buy-and-Hold sounds simple. But sticking with a stock allocation chosen at a time when stocks are a low-risk asset class during times when the risk goes sky high causes an emotional toll that adds to complexity in its own way. No long-term strategy will work if you don’t stick with it and a Buy-and-Holder just experiences too much change in his risk profile for him to be able to stay the course indefinitely. Valuation-Informed Indexers enjoy a smoother ride and that makes all the difference.
You’re back. Yesterday http://www.passionsaving.com was working but arichlife.passionsaving.com was showing some odd page.
But order is restored.
If you and VII have been so successful, why are not famously wealthy by now?
What happened to your site yesterday? Goon attack?
But order is restored.
Bob Dylan once said that: “I accept chaos.”
Order is restored temporarily. I don’t think that one can ever count on order having been restored permanently.
Rob
What happened to your site yesterday? Goon attack?
I can’t say that I would put it past you, Anonymous. As Shakespeare once wrote: “A Goon is a Goon is a Goon.”
But I do not know for a fact that you Goons were the cause of the problems. There are other possibilities too.
Rob
If you and VII have been so successful, why are not famously wealthy by now?
Because there have been thousands of books published advocating Buy-and-Hold. And there are thousands of experts who have built their careers promoting the Buy-and-Hold concept. And because millions of investors have bought into the concept (never even having heard of Valuation-Informed Indexing) and can’t stand the thought that their retirement hopes are riding on a strategy that was discredited by the peer-reviewed research 37 years ago.
The research-based case for Shiller’s finding that valuations affect long-term returns is rock solid. But the opposition to open discussion of the implications of Shiller’s Nobel-prize-winning research is rock solid too.
We have a standoff for the time-being. All of the evidence is on one side of the table and all of the power is on the other. Will some of the power move to the side that already holds all of the evidence in the days following the next price crash? I sure hope so. I sure expect so. But we are going to have to wait and see to find out for certain. You Goons are not going to buy in just because I say that that’s where I sincerely think things are headed.
My best wishes to you.
Not Famously Wealthy (Yet!) Rob
“But we are going to have to wait and see to find out for certain. ”
We have been waiting a long time. How much longer do we have to wait?
You can stop waiting today if that is your preference. Please just go and live your life. I wish you the best of luck with it. Does that help at all?
I have to wait until things change. I am physically incapable of posting dishonestly re safe withdrawal rates. I care about the people who read my stuff. And I view a failed retirement as a serious life setback. So I am stuck.
But you’re not. You are free to do what you please. With my blessing.
If you want to wait, you may do so. But it is 100 percent your call.
I hope that helps a small bit.
Rob
“I have to wait until things change. ”
At your age, why did you allow this to happen? You should have secured your retirement long before this. I do not want to take risks like you and have long ago taken steps to secure my retirement by avoiding get rich quick timing schemes.
We live in communities, Anonymous. I didn’t “allow” the Ban on Honest Posting to happen. I spoke out against it. Forcefully and frequently. The community went the other way. These things happen from time to time in this big old mixed-up world of ours.
Say that I had agreed to post dishonestly so as not to incur Greaney’s wrath and say that I had earned several million dollars as a result of my work on the saving side. I would be financially set, right? Not right. If our failure as a society to deal with the errors that Shiller uncovered in the Buy-and-Hold Model causes an economic collapse down the road a piece, I would lose those millions in the crash. So I violate my conscience and I end up in a horrible place financially all the same. Huh? What the f?
You say that you took steps to secure your retirement. I don’t agree. The most basic step that you need to take is to speak out in opposition to the Ban on Honest Posting. If you fail to bring the Ban on Honest Posting to an end, you are living in a dream world. You don’t know how much of the amount that you have put aside is going to be there for you when you need it. If you were thinking clearly, you would want to see every poster on every discussion board and blog on the internet posting honestly. That’s your only protection against making mistakes from which you may never be able to recover.
I think that my retirement is ten times more secure than it would be had I never worked up the courage to point out that Greaney’s retirement study lacks a valuation adjustment. Is it perfectly secure? It is not. I have not been successful in trying to bring the Ban on Honest Posting to a full and complete stop. So I remain at risk. But I have done my part.
And I have seen lots of others make serious efforts. So I believe that we all will be able to join together and bring the next economic crisis to an end by opening every discussion board and blog to honest posting on the last 37 years of peer-reviewed research. We have generated thousands of powerful investing insights over the past 37 years. I think that when we begin putting them to good use we will all see how important and wealth-generating it was that we held these discussions.
Any wealth that you possess comes from the fact that the United States has as one of its founding principles a belief that it is okay for people to spread new knowledge that is discovered and that helps everyone even it that means that a small number of people might have to learn how to pronounce the words “I” and “Was” and “Wrong.” You seem to think that you can toss aside the thing that brought you your wealth and still continue to enjoy the wealth far into the future. I don’t think it works that way.
I didn’t feel comfortable failing to speak up about the errors in Greaney’s study in the days when I was afraid to do so. Now I see why. I rationalized my behavior then just as lots of good and smart people rationalize their behavior now. They too will see in the days following the next price crash that they should have gone with what their hearts and minds and consciences told them.
Shiller has been awarded a Nobel prize for his “revolutionary” (his word) research findings. The far-reaching implications of his powerful research findings are wealth to us all. We all should be tapping into that enormous storehouse of wealth. It’s hard to see how our retirements will survive if we fail to do so. I have done so. I began doing so on the morning of May 13, 2002, and I have just kept soldiering forward for 17 years now. I am a lot wealthier than I would have been had I continued to act as if I didn’t see the error in Greaney’s study. If you want to fool yourself into believing that the numbers on your portfolio statement represent something real and lasting, that’s on you. I wouldn’t feel even a tiny bit safe or responsible or smart playing it that way. Not this boy, you know?
I hope that helps a small bit, dear Goon friend.
Rob
Your claims about Greaney are a big nothing burger. Setting that aside, you quit your job and also pulled out of the stock market long before your interaction with Greaney,so your retirement failurehas nothing to do with Greaney.
Um….
That makes good sense, Anonymous.
Truly outstanding!!!!
Nothing Burger Rob