I’ve posted Entry #14 to my monthly column on Valuation-Informed Indexing at the Financial Highway site. It’s called Three Phony Criticisms of Buy-and-Hold.
Juicy Excerpt: I’m a critic of Buy-and-Hold. I believe that investors MUST change their stock allocations in response to big valuation shifts to have any hope whatsoever of keeping their risk profile roughly constant. I don’t believe that is is possible that a Buy-and-Hold strategy could ever work in the long term.
That said, I believe that the Buy-and-Holders got a lot more right than they got wrong. Since the 2008 price crash it’s become fashionable to slam Buy-and-Hold for all sorts of reasons that I view as phony. It would be a terrible thing for investors to lose confidence in all of the many investing insights put forward by the Buy-and-Holders that really have stood up to scrutiny. This column will examine three criticisms that I view as unfounded and explain why I think you should hold to the Buy-and-Hold line on the points under question.