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A Rich Life

The Old Ideas on Saving & Investing Don't Work -- Here's What Does

  • "Valuation-Informed Indexing Is the Same Song We Sing. Glad You Belong to the Same Choir We Do."





    Carolyn McClanahan, Director of Financial Planning
    for Life Planning Partners, Inc.

  • "Retirees Now Frequently Base Their Retirement Decisions on the Portfolio Success Rates Found in Research Such as the Trinity Study.... This Is Not the Information They Need for Making Their Withdrawal Rate Decisions."




    Wade Pfau, Academic Researcher

  • "The P/E10 Tool Could Drastically Change
    How the Entire Investment Industry
    Operates and Measures Risk."





    Larry, A PassionSaving.com Site Visitor

  • "The Your Money or Your Life Book
    for a New Generation."





    Beatrix Fernandex, Book Reviewer
    for Dollar Stretcher Site

  • "A Newer School of Thought Believes That the Safe Withdrawal Rate Depends on How Stocks Are Priced at the Time You Begin Making Withdrawals."





    Scott Burns, Dallas Morning News Finance Columnist

  • "A Fascinating Retirement Calculator."







    Michael Kitces, Maryland Financial Planner

  • "The Evidence is Pretty Incontrovertible. Valuation-Informed Indexing...Is Everywhere Superior to Buy-and-Hold Over Ten-Year Periods."




    Norbert Schenkler,
    Co-Owner of Financial WebRing Forum

  • "Every Detail Shows Rob's Respect
    for His Information and His Reader."






    Audrey Owen, Owner of Writer's Helper Site

  • "You’ve Accomplished Something Radical
    With Your Idea of Passion Saving."





    Mark Michael Lewis,
    Money, Mission & Meaning Talk Show Host

  • "Big Moves Out of Stocks Should Not Be Done at All. But Strategic Asset Allocation Can Be Done At Very Rare Times, Maybe Six Times in an Investor’s Lifetime, Three Times When the Market Is Stupidly High and Three Times When Stupidly Low."



    John Bogle, Founder of Vanguard Funds

  • "Valuation-Informed Investing and Passive Investing
    Share More of a Common Ancestry
    Than It Might Appear at First."





    Jacob Irwin, Owner of Passive Investing Blog Carnival

  • "It Is Great to See a Finance Journalist Who Understands That Valuations Matter. Efficient Market Zealotry Is Rampant in the Journalism Community. I Just Love Your Valuation-Based Return Calculator."




    Rich Toscano, Pacific Capital Associates

  • "There Is Always An Unlimited Supply of Complainers Against Any Good Idea."






    Mr. Money Mustache Blogger

  • "Rob: This Has Been One of the Most Insightful and Helpful Comments I Think Anyone Has Ever Posted. Thank You for This Lesson and for Sharing Your Knowledge on This Subject!"




    My Money Design Blogger

  • "There Is An Extensive Literature About the Predictability of Long-Term Stock Returns. There Is an Extensive Literature About Short-Term Market Timing. My Question Is About Long-Term Market Timing. The Literature Seems Slim."



    Wade Pfau, Retirement Income Professor
    at The American College

  • "Your Ideas Are Sound."







    Rob Arnott, Financial Analysts Journal Editor

  • "For Years, the Investment Industry Has
    Tried to Scare Clients Into Staying Fully Invested
    in the Stock Market at All Times, No Matter
    How High Stocks Go. It's Hooey.
    They're Leaving Out More Than Half the Story."



    Brett Arends, The Wall Street Journal

  • "There Are Time-Periods Where Stocks Are a Terrible Addition to That Portfolio. Yet Inexplicably, We As Planners STILL tend to Suggest That It Is 'Risky' to Not Own Stocks When in Reality the Only Risk Is to Our Business."




    Michael Kitces, Maryland Financial Planner

  • "Valuation-Informed Indexing Provides More Wealth for 102 of 110 of the Rolling 30-Year Time-Periods While Buy-and-Hold Did Better in Eight of the Periods."






    Wade Pfau, Academic Researcher

  • "There Is a Growing Behavioral Economics Movement, But It So Far Has Had Limited Impact. Economists Are Not Fond of the Softness and Imprecision of Psychology. These Notions Are Considered Vaguely Unprofessional and Flaky."



    Robert Shiller, Yale University Economic Professor

  • "I Would Occasionally Get a Response Post
    Saying I Was 'the Best Since Rob Bennett
    Challenged Us to Think.'"




    A Popular Bogleheads Forum Poster Named "Retired at 48" Who Was Banned for Challenging Buy-and-Hold

  • "New Research by Rob Bennett Shows That
    Even a 4% Withdrawal Rate Could Cause Failure
    If You Start Retirement When
    Stock Market Valuations Are High.”




    Bernard Kelly, Consultant

  • "FuhGedDaBouDit!"




    William Bernstein, Author of
    The Four Pillars of Investing
    (When Asked Whether We Can Use the Old School Safe Withdrawal Rate Studies to Plan Our Retirements)

  • "This [The Stock-Return Predictor]
    Is a Very Handy Little Tool."






    Felix Salmon, Market Movers Blog

  • "A Much Simpler Way to Bring
    the Valuation Issue to Focus."
    (Referring to The Stock-Return Predictor)





    Karteek Narayanaswarmy, Blogger

  • "It's Informative, It's Based on Solid Data and It Provides Useful Results." (Referring to The Stock-Return Predictor)






    Political Calculations Blog

  • "Meet Three Couples Who Left the Corporate World to Do the Kinds of Work That Satisfied Them."






    Liz Pulliam Weston, MSN Money Columnist

  • "I Like Rob's Fresh Views and Tips
    on the Subject of Saving Money."






    The Digerati Life Blog

  • "A Very Solid Approach to Investing."







    Michael Harr, Founder of Walden Advisors

  • "Rob Bennett Has Been on a Tear With One Outstanding RobCast After Another."





    John Walter Russell, Owner of
    Early-Retirement-Planning-Insights.com Site

  • "It’s Time for a Different Way to Look at Investing, and Rob Is Onto Something Here."






    Kevin Mercadante, Owner of Out of Your Rut Blog

  • "My Afternoon Train Reading."
    (Referring to Rob's Article titled
    Why Buy-and-Hold Investing Can Never Work)





    Barry Ritholtz, Owner of The Big Picture Blog

  • "What Is It With Guys Named Rob?
    Longtime Index Agitator Rob Arnott Has Now
    Been Joined on These Pages by a
    Vanguard Diehard Agitator Named Rob Bennett."




    Jim Wiandt, IndexUniverse.com Publisher

  • "He Offers a Fresh New Perspective
    that Will Motivate You to Get on Track
    With a Solid Savings Plan."





    Lynn Terry, Click Newz Blog

  • "While Browsing at www.PassionSaving.com the Other Day, I Discovered an Article Featuring Ten Unconventional Money-Saving Tips. Each of These Offers a New Way to See Money."




    J.D. Roth, Owner of Get Rich Slowly Site

  • "Rob Has Ideas About Investing That Many Bloggers Find 'Interesting.' His Posts Are Often Controversial and Always Thought Provoking."





    Miranda Marquit, Planting Money Seeds Blog

  • "Is There a Way to Turn Saving Into Something Fun? If There Was, I Bet a Lot More of Us Would Do a Lot More Saving. I Found a Website Where This Basic Premise Is Explored in Great Depth."




    The Great WeiszGuy Blog

  • "I Have Much More Confidence in My Ability to Understand What Is Happening....I Thank You for Your Public Service, and, In Another Dimension, for the Personal Courage It Took to Make It Happen."




    Elizabeth, A PassionSaving.com Site Visitor

  • "I Was Hooked on the Idea of [Passive] Index Indexing, But Something Inside Made Me Wonder "Too Good to Be True?" and "What's the Downside?" I Happened on to Your Site and Valuation-Informed Indexing Seems to Make Sense."



    Coleen, PassionSaving.com Site Visitor

  • "Reads Like a Casual Conversation
    with a Likable Guy Who Wants Nothing More
    Than to Help Others Experience the Same Joy
    and Happiness He Has Found."




    Kara, Reader of Rob's Book

  • "Your 'Secrets' Are Exactly Like Magic Tricks: Once Revealed, They Look So Simple, Yet You Need Somebody to Show You How It Works."





    Kramerizio, Secrets of Retiring Early Reader

  • "Rob's Da Man! Never in the History of the Diehards Forum Has One Poster, Always Making Civil and Well Thought-Out Posts, Managed to Irritate So Many Without Anyone Being Able to Articulate a Good Reason As to Why."




    Mephistopheles, Bogleheads Forum Poster

  • "I’ve Been Surprised at How Controversial This Idea Is, but If Most People Are Buying and Holding, They Are Emotionally Invested in This Strategy."





    Jennifer Barry, Live Richly Blogger

  • "The Findings for [Long-Term] Market Timing Are So Robust That It Hardly Matters How We Do It."






    Wade Pfau, Asociate Professor of Economics

  • "The Elegant Simplicity of His Ideas Throughout Warms the Heart and Startles the Brain."






    Tom Gardner, Co-Founder of the Motley Fool Site

  • "Mr. Bennett Evidences an Unusual Skill....
    You'll Have to Buy a Copy....Extraordinary....
    A Massive Heap of Crap."




    John Greaney,
    Owner of the Retire Early Home Page Site

  • "By Reading All the Information on Your Website I Was Able to Develop a Part of Me I Didn't Know I Would Be Able to Become."





    Javier, PassionSaving.com Site Visitor

  • "Innovative Financial Thinking."







    No Limits, Ladies Blog

  • "Knowledgeable."







    Hope to Prosper Blog

  • "Holy Toledo! This Is Great Stuff!"






    Bill Schultheis, Author of
    The New Coffeehouse Portfolio

  • ""He Offers Down-to-Earth But
    Nevertheless Eye-Opening Insights About
    the Why and the How of Early Retirement."





    Secrets of Retiring Early Reader

  • "Challenges Unfounded Assumptions."







    Bill Sholar, Founder of the Early Retirement Forum

  • "Seminal."






    John Greaney, Owner of Retire Early Home Page Site
    (Pre-May 13, 2002 Version)

  • "It’s Always Good to Read Something New That Challenges Your Way of Thinking."






    Invest It Wisely Blog

  • "Rob, Thanks for All of Your Articulate, Well-Written and Well-Reasoned Commentary."






    Elle, a Poster at the Joe Taxpayer Blog

  • "Although Rob and I Don’t See Eye to Eye
    on Every Detail, His Site Is a
    Valuable Resource for Research."





    Ken Faulkenberry, Portfolio Manager

  • "Thanks, Rob. I Love Seeing So Many
    Personal Finance Bloggers Who Offer Such
    High Quality Content on Their Own Sites Come Here
    to Weigh In [on Your Ideas]."




    Married With Debt Blogger

  • "A Ton of Tremendously Useful Content."







    Network Abundance Radio

  • "Your Enthusiasm Is Infectious."







    Ruth, a PassionSaving.com Site Visitor

  • "I Woke Up at 4:00 am and Stared at the Wall for 20 Minutes....Thank You for Doing What You Do."






    Tasha, A PassionSaving.com Site Visitor

  • "It Might Just Give You
    a New Way of Looking at Saving."






    Kevin Surbaugh, Owner of Debt Free 4Ever Blog

  • "'Staying Too Long in a Job Where You Don’t Feel Relevant Takes a Toll,' Said Rob Bennett, Who Worked for Years in a Well-Paying Corporate Communications Job Where He Didn’t Have Enough to Do."




    The New York Times

  • "You Have Started One of the Most Interesting
    and Stimulating Discussions This Board has Seen
    in a Long Time."





    Poster at Motley Fool Site

  • "A Respected Author and Commentator, Mr. Bennett has Dedicated Himself to Educating Average Investors to Avoid the Most Common Errors."





    Liberty Watch Site

  • "I've Gone from Shattered Dreams of Early Retirement to Glimpses of Hope to Reassurance from Quantitative Research."





    Patricia, A PassionSaving.com Site Visitor

  • "Some of the Most Helpful and Insightful Market Discussions on the Web Take Place on These Pages."





    A Poster at the Safe WithDrawal Rate Research Group
    (Founded by Rob)

  • "Rob is the Only Person I Know (If Only via Message Board) Who has Completely Opted Out of Participation in the Stock Bubble. And You Know What? He Has Benefited Immensely from Doing So."




    Poster at Motley Fool

  • "Makes the Subject of Saving Edgy and Fresh."







    Maxine, A Reader of Rob's Book

  • "Rob Bennett, the Author of a Book Called Passion Saving, Thinks the Saving Problem Is Partly One of Packaging. So He Prefers to Couch it in the Language of Freedom."





    The Wall Street Journal

  • "This Tip Comes from Rob Bennett
    of the Finance Site PassionSaving.com."






    Lifehacker.com

  • "I LOVE This Article and
    Am Proud to be Publishing It!"




    Chuck Yanikoski, Executive Director of
    The Association of Integrative Financial
    and Life Planning

  • "Rob Bennett: Some People Disagree With Him, and He Rubs a Lot of People the Wrong Way. But He Has Interesting Ideas About Valuation-Informed Indexing, and He Delves Into a Lot of What Makes a Successful Investing Strategy."



    Miranda Marquit, Planting Money Seeds Blog

  • "Rob….Wow…..Your Response Sent Shivers
    Up the Ol’ Pilgrim Spine."






    Neal Frankie, Owner of the Wealth Pilgrim Blog

  • "I Have Counseled My Clients to Allocate a Percentage to Equities Based Upon Market Valuations....I Feel Like I've Found a Kindred Spirit. Fascinating Web Site."





    Tom Behlmer, Financial Planner

  • “A Simple Age-Based Asset Allocation Formula Is Not Appropriate, and Any Sensible Asset-Allocation Formula Should Combine Both Age/Investment Horizon and Market Valuation Levels.”




    RationalInvestor.biz

  • "Had a Guest Post This Week from Rob Bennett, Where He Discusses the Benefits of Value-Informed Indexing, Which I Find Very Intriguing."





    Sustainable Personal Finance Blog

  • "I Can Appreciate Rob's Comments.... Buy-and-Hold?
    For the Most Part, a Long Obsolete Theory."






    Neal Deutsch, Certified Financial Planner

  • "Utterly Brilliant!"







    Secrets of Retiring Early Reader

  • "Your Website Is So Enjoyable That It Is Keeping Me From My Research As I Am So Excited That I Have Found Such a Valuable Resource."





    Stuart, a PassionSaving.com Site Visitor

  • "What We're Talking About Here Really
    ...Is Empowerment."






    Motley Fool Poster

  • "The Return Predictor Is Based upon the Principle that Over the Long Term, Stock Market Prices Will Reflect the Ten-Years Earnings Growth of the Underlying Companies. Prices Return to a Common Growth Pattern."




    Links.com Review of The Stock-Return Predictor

  • "Rob’s Arguments in Favor of Value Investing Actually Make a Lot of Sense In a Way That Should Make Any Rational Buy-and-Holder Uncomfortable."





    Pop Economics Blog

  • "What I Don't Understand Is How Rob Can Correspond in Such a Sweet and Polite Way
    -- Yet He Irritates Me to No End!"





    Financial WebRing Forum Poster

  • "You Go About It in a Manner that is Catastrophically Unproductive by Adding Missionary Zeal that Inflates Your Importance and Demeans Others. The Whole Idea That There is a New School of Safe Withdrawal Rates Reeks of Personal Aggrandizement."



    Scott Burns, Dallas Morning News

  • "Inflammatory."







    Morningstar.com Site Administrator

  • “What Warren Buffett Did Was Essentially Quite Close to What Rob Bennett Has Written. Buffett Has in Fact Been Cleverly Incorporating Long-Term Market Timing Based on Valuation of the Market in His Allocation of Money to Stocks.”



    Investor Notes Blog

  • "This Report Offers A Fresh Perspective That Is Rarely Found In Other Financial Literature."






    Secrets of Retiring Early Reader

  • "Rob Bennett Says That Market Timing Based on Aggregate P/E Ratios Can Be a Far More Effective Strategy. This Claim Is Consistent With Shiller's Analysis and I Can See How It Might Be So."




    Rajiv Sethi, Economics Professor at Columbia Univeristy

  • "Retiring Early Was A Concept I Did Not Entertain. I Was Going to Retire at 65 After Putting in 40 Years. Now I Am Glad To Say That All That Has Changed."





    Secrets of Retiring Early Reader

  • "In a Couple of Days, I Had
    Devoured the Entire Book."






    Reader of Rob's Book

  • "FIRECalc May Not Be the Last Word
    on Safe Withdrawal Rates."






    Jonathan Clements, Wall Street Journal

  • "It Seems to Me That Some on This Board Feel Threatened by the Arrival of Rob and His Ideas. They Feel a Threat to Their Perceived Elite Status."





    Motley Fool Poster

  • "You've Got to Say One Thing for Rob. He Has NEVER Lowered Himself to Ad Hominen Attacks -- Subliminal or Otherwise -- on Any Other Person on This Board. Not Once. Ever. At Least Give Him Credit for That."




    Motley Fool Poster

  • "I Have Never Seen Rob Show Incivility. No Matter What. Truly Amazing. Either He Is Really the Output of an Artificial Intelligence Program, or the Man's on the Way to Becoming a Saint!"




    Early Retirement Forum Poster

  • "You're the Politest Guy on the Internet.
    Such a Soft Touch!"






    Jonathan Lewis

  • "Props for Keeping Your Cool in the Married with Debt Article. Best of Luck Combating Buy-and-Hold."






    Money Mamba Blogger

  • "I Caught Up [at the Financial Bloggers Conference] With a Fairly Controversial Financial Blogger
    Named Rob Bennett, Who Struck Me As the
    Nicest Guy Around. There -- I Said It!"




    Digerati Life Blogger

  • "In Rob Bennett's Case, He Was Banned for No Known Listed Forum Policy. Except His Viewpoint Was Different From Other Bogleheads and [He Was Perceived As] a Threat."




    Investor Junkie Blog

  • "Mr. Bennett, You Are Spot on About Integrating Some Type of Valuation Filter to One's Stock Allocation. Astute Investors Have Incorporated Some Type of 'Valuation Timing' Into Their Investment Decisions Since the Beginning of Time."



    Poster at the Psy Fi Blog

  • "His Insights Into What Is Really Going On In The Stock Market Are Quite Compelling."






    Future Storm Blog

  • "It Was an Epiphany...Valuation-Informed Indexing Beats Buy-and-Hold Over Most Long-Term Holding Periods at Much Lower Volatility."





    Sam, a PassionSaving.com Site Visitor

  • "I Am Intrigued By Your Ideas."







    Adam Butler, Portfolio Manager

  • "I Read the Book and I Loved It.
    The Philosophy Resonated with Me.
    I Am a Believer in Your Concept."





    Dr. Peter Weiss, Author of More Health, Less Care

  • "If Your Investment Ideas Can Do for Investing
    What Weston Price’s Ideas Did for Food,
    You’ve Got Our Attention."





    End Times Hoax Blog

  • "I Have Looked at His Website and Reviewed His Research and Find It Both Compelling and Completely Logical and Common-Sense-Based."





    Poster at Free Money Finance Blog

  • "If Investors Paid More Attention to Valuations, We Would Have Fewer Boom-and-Bust Cycles. The Investing Institutions Are Definitely Going to Avoid It Because It Affects Their Income."




    Hope to Prosper Blog

  • "The Calculators on Your Site Are Great Resources. It Amazes Me How So Many People Can Say 'Valuations Matter' Yet, in the Next Breath, They'll Say That We Should Ignore Valuations."




    John Marlowe, Logistics Analyst at Hess Corporation

  • "Must Read As Per My Viewpoint
    For All Value Seekers."






    Ajit Vakil, Value Investing Congress

  • "His Approach Is Both Mathematically Rigorous
    and Easy to Understand."






    Online Investing AI Blog

  • "There Is Nothing More Doubtful of Success Than a New System. The Initiator Has the Enmity of All Who Profit By Preservation of the Old Institution and Merely Lukewarm Defenders in Those Who Gain By the New One."




    Machiavelli

  • "Difficult Subjects Can Be Explained to the Most Slow-Witted Man If He Has Not Formed Any Idea of Them. But the Simplest Thing Cannot Be Made Clear to the Most Intelligent Man If He Believes He Knows Already What Is Laid Before Him."



    Tolstoy

  • "I Am Not Afraid. I Was Born to Do This."







    Joan of Arc

  • "I Certainly Have Seen the Academic Profession Squelching Unfashionable ideas and Have Often Been on the Wrong Side of It. Kuhn Shows How Most Pathbreaking Scientific Ideas Are Rejected at First, Usually for Decades.”




    Carol Osler, Brandeis International Business School

  • "First They Ignore You, Then They Ridicule You, Then They Fight You, Then You Win."






    Ghandi

  • "We Cannot Assume the Existence of Predictability Just Because There Are No Studies That Fully Reject It."






    Valeriy Zakamulin, Economics Professor

  • "I Am Also Extremely Grateful to Rob Bennett for Motivating This Topic and Contributing His Experience and Encouragement."





    Wade Pfau, Academic Researcher

  • "Rob Bennett Was an Early Pioneer in 3rd Generation Modeling by Advocating (Through Various Online Forums) that Withdrawal Rates Must Be Adjusted for Market Valuations Consistent with Research by Campbell and Shiller."



    Todd Tresidder, Financial Mentor Blog

  • "I Am Fascinated by the Growing Body of Research that Revolves Around the P/E10 Ratio by Robert Shiller, Doug Short, Wade Pfau, Michael Kitces, John Hussman, Crestmont Research, Jim Otar, Mike Philbrick, Adam Butler & Rob Bennett."



    Kay Conheady in Advisor Perspectives

  • "Rob Is an Enigma in the Personal Finance World. He Has Interesting Theories on Investing Based on Market Valuations. But He Weaves a Tale Which Makes the Stories of Alexander Litvinenko & Gareth Williams Seem Tame by Comparison."



    Don't Quit Your Day Job Blog

  • "In Recent Years, the 4 Percent Rule
    Has Been Thrown Into Doubt."






    The Wall Street Journal

  • "A Safe Withdrawal Rate Is Very Dependent
    on the Valuation of the Stockmarket
    at the Retirement Date."





    Economist Magazine

  • "I Have Read Everything I Can About Valuation-Informed Indexing. Buy-and-Hold Is Extremely Problematic. I Respect the Passion, Hard Work and Research That You Have Put Into This Very Important Issue. Your Work Has Huge Value."



    Carl Richards, Owner of Clearwater Asset Management

  • "The World of Personal Finance Blogging Needs More Rob Bennetts. He’s Passionate. He’s Intelligent. He’s Writing Things That Go Against the Grain."





    Financial Uproar Blog

  • "Beyond Awesome."







    Larry, a PassionSaving.com Site Visitor

  • "The Wealth Management Industry Seems Intent on Containing This Discussion for Fear Clients Might Discover that the Emperor Has No Clothes."





    Adam Butler, Portfolio Manager

  • "Recommended Reading."







    Jesse's Cafe Americain Blog

  • “All Who Are Still Holding Equities at Present Levels Because Their Financial Adviser Insists that Timing Market Cycles Is Impossible to Do -- Read This!"





    Juggling Dynamite Blog

  • "The Fact that Aggressive and Short-Term Market Timing Was Unproductive Did Not Mean That There Were Never Times When It Would Be Wealth-Maximizing to Get Out of the Market."



    Scott Burris,Director of the Center for
    Health Law, Policy and Practice

  • "The Amount of Return You Can Expect From a Diversified Equity Portfolio Is Inversely Correlated to the Market Valuation at the Start of the Holding Period. It Is One of the Most Robust Statistical Relationships in Modern Finance."




    Todd Tresidder, Financial Mentor Blog

  • "Why Would Your Job Be Jeopardized
    By Such a Sensible Claim?"





    Marcelle Chauvet, Econmics Professor
    at University of California

  • "Received Worrisome E-Mail from Rob Bennett. Warns of Risk with Buy-and-Hold Investing
    -- I Have No Clue."





    Vivek Wadhaw, Business Week Columnist

  • "As Attorney, Tax Expert and Financial Writer Rob Bennett Told Us, the Problem Is That, By the Time Shiller Published His Research, Many Big Names Had Already Endorsed Buy-and-Hold."




    ZeroHedge.com

  • "This Seems to Me to Be a Fundamental Challenge to Some of the Most Basic Tenets of the Boglehead Paradigm."






    Bogleheads Forum Poster

  • "You Want to be Very, Very Wary of Anything Connected with Rob Bennett, the Most Infamous Troll in the History of Investing Forums on the Internet."





    Alex Fract, Owner of Bogleheads Forum

  • “I’ve Had My Fill of Those Long-Winded Posts that Include Distortions, Unsubstantiated Claims, Misquotes and Comments Taken Out of Context.”




    Mel Lindauer, Co-Author of
    The Bogleheads Guide to Investing

  • "Haven't You Noticed Yet That NO ONE Discusses Your Ideas, NO ONE Mentions Your Name, NO ONE Goes To Your Web Site."





    One of the Greaney Goons

  • "I've Had Similar Experiences. I Know of Two Young Professors Who Wanted to Do Research on Fundamental Index and Reported to Me That Their Colleagues Advised Them That This Line of Research Could Derail Their Career Prospects."



    Rob Arnott, Financial Analysts Journal Editor

  • "As with Drug Studies Funded by Drug Companies, It Would Be Churlish to Suppose that the Chicago School of Business Was in the Bag. But It Would Also Be Idealistic to Assume That There Was No Funding Bias at All."




    Bogleheads Poster

  • "This Sort of Intimidation Is Not Acceptable. The Cigarette and Pharmaceutical Industries Found Research Supporting Their Products By Funding It. But That Was Big Money Supporting Outcomes, Not Dissuading Others."




    Lyn Graham, 25-Year CPA

  • "Financial Economists Gave Little Warning to the Public About the Fragility of Their Models. There Is No Ethical Code for Professional Economic Scientists. There Should Be One."



    Paper Titled The Financial Crisis and
    the Systemic Failure of Academic Economics

  • "The Situation [Referring to the Intimidation Tactics Used to Silence Academic Researcher Wade Pfau's Reporting of the Dangers of Buy-and-Hold Investing Strategies] Seems Well Below Any Professional and Academic Acceptable Standards."



    Albert Sanchez Graells, Law Lecturer

  • Many Academics Can Become Quite Strident When Their Views Are Challenged. Academia Is Often Subject to Self-Serving Bias That Obliterates Ethical Bounds."





    Ted Sichelman, Law Professor

  • "I Don't Like Too Much the Conspiracy Idea. I Am Not Pressured By Anyone in My Research."






    Roberto Reno, Economics Professor

  • "This Is What Investing Should Be -- Calculated, Deliberate, Confident, Informed and Simple."






    Aaron Friday, Owner of Aaron's Blob Blog

  • "It Is Obvious that Rob, in Attempting to Identify New Safe Withdrawal Rate Strategies...Is Goring Your Ox. If Rob Improves on [the] Safe Withdrawal Rate Methodology, the Implication Is Clear: You Are All, Metaphorically, Out of Business."



    Bogleheads Poster

  • "I Applaud His Effort to Inject Another Piece of Objectivity Into a Very Complex, Highly Subjective Topic -- Making Money in the Market."





    Bogleheads Poster

  • "Naturally, I Am Finding That Valuation-Informed Indexing Can Allow You to Reach a Wealth Target With a Lower Saving Rate and to Use a Higher Withdrawal Rate in Retirement Than You Could With a Fixed Allocation."



    Wade Pfau, Professor of Retirement Income
    at The American College

  • "A Careful Examination of Past Returns Can Establish Some Probabilities About the Prospective Parameters of Return, Offering Intelligent Investors a Basis for Rational Expectations About Future Returns."




    Jack Bogle, Founder of Vanguard Funds

  • "The Ability to Estimate the Long-Term Future Returns of the Major Asset Classes Is Perhaps the Most Important Investment Skill That An Indivisual Can Possess."




    William Bernstein, Author of The Four Pillars of Investing

  • "The Stock Market Resembles Roulette. In Both Cases, the Accuracy of Sensible Forecasts Rises Over Time."






    Andrew Smithers, Co-Author of Valuing Wall Street

  • "Returns Are for the Most Part a Matter of Simple Arithmetic...Much of Our Industry Seems Fearful of Basic Arithmetic of This Sort."





    Rob Arnott, Financial Analysts Journal Editor

  • "How Can It Be That One-Year Returns Are So Apparantly Random and Yet Ten-Year Returns Are Mostly Forecastable? In Looking at One-Year Returns, One Sees a Lot of Noise. But Over Longer Time Intervals the Noise Effectively Averages Out and Is Less Important."




    Yale Economics Professor Robert Shiller

  • "The Notion That Rich Valuations Will Not Be Followed By Sub-Par Long-Term Returns Is a Speculative Idea That Runs Counter to All Historical Evidence. It Is an Iron Law of Finance That Valuations Drive Long-Term Returns."




    John Hussman

  • "It's January and the Temperature Is Below Freezing. If You Asked Me Whether It Will be Warmer or Cooler Next Tuesday, I Would Be Unable to Say. However, If You Asked Me What Temperature to Expect on April 9, I Could Predict "Warmer Than Today" and Almost Surely Be Right."



    Michael Alexanfer, Author of Stock Cycles

  • "If the Response Is "Who Knew?", It Won't Be Much Comfort for Retirees in the Employment Line at Wal-Mart. This is Especially True Since a Rational Understanding of History and the Drivers of Longer-Term Stock Returns Can Help Retirees To Avoid That Surprise."




    Ed Easterling, Author of Unexpected Returns

  • "New of the Demise of the Random Walk Has Only Very Slowly Spread, In Part Because Its Overthrow Came as a Shock. If the Random Walk Hypothesis Were Correct, the Most Likely Return Would Be the Historic Average Return. The Evidence, However, Is Strongly Against This."



    Andrew Smithers, Co-Author of Valuing Wall Street

  • "I Don't Think We Can Debate the Merits of This Type of Forecasting [Referring to the Numbers Generated by The Stock-Return Predictor] Unless We Believe 'This Time It's Different.'"



    Poster at Bogleheads Forum
    (Before the Ban on Honest Posting Was Adopted There)

  • "I've Seen Absolutely Nothing From You That I Can Use in a Tangible Fashion to Formulate an Investment Plan. Your Ideas Are So Mushy That It's a Complete Waste of Time to Even Consider Them."




    Bogleheads Forum Poster

  • "Do You Really Think Your Tool
    [The Stock-Return Predictor]
    Is 'Wiser' Than the Market?
    If It Was That Easy,
    Everybody Would Be Doing It."



    Bogleheads Forum Poster

  • "The Expected Return of Stocks [As Reported By The Stock-Return Predictor] Needs To Be At Least the Treasury Inflation-Protected Securities (TIPS) Rate for Stock Investing To Make Sense."




    Bogleheads Forum Poster

  • "I Have Used Valuations to Adjust My Asset Allocation For Many Years With Very Favorable Results."





    Poster at Bogleheads Forum
    (Prior to the Ban on Honest Posting)

  • "I Don't Care If You Do or Don't Believe That the Market Will Behave Similarly in the Future As It Has in the Past. Either Way, This [The Stock-Return Predictor] Is an Excellent Way to Understand What the Market Has Done In the Past."


    Poster at Bogleheads Forum
    [Prior to the Ban on Honest Posting]

  • "My Role Is To Give People Who Don't Like What the Historical Stock-Return Data Says About the Effect of Valuations on Long-Term Returns Somebody To Yell At On Internet Discussion Boards."



    Rob Bennett at Bogleheads Forum
    (Prior to the Ban on Honest Posting)

  • "It Really Is a Shame and Indefensible That So Many Feel the Need to Jump Into It With No Interest of Posting on the Topic But Just to Disrupt. Are You That Insecure? Some on the Forum Have an Interest in This Topic. If You Don't, Stay Out!"



    Poster at Bogleheads Forum
    [Prior to the Ban on Honest Posting]

  • "Irrational Behavior Does Follow Patterns. But How Many Experts in Behavioral Finance Believe That Such Knowledge Can Be Used to Predict Markets? Basically, None. Your Model Cannot Attain the Level of Predictive Value You Claim."



    Poster at Bogleheads Forum
    [Prior to the Ban on Honest Posting]

  • "The Safe Withdrawal Rate Studies Are Based on History. This [The Retirement Risk Evaluator] Shows, Based on the Same History, What the Probabilities Are for the Future at Various Starting Points. If the First Has Value, Then Surely This Does Too."



    Poster at Bogleheads Forum

  • "There Are Hundreds of People Who Contributed to This. This Calculator [The Stock-Return Predictor] Demonstrates in a Compelling Way the Power of This New Internet Discussion-Board Communications Medium."




    Rob Bennett at the Bogleheads Forum
    (Prior to the Ban on Honest Posting)

  • "A P/E10 of'26' Is Bad. Now Look at the 30-Year Return Predicted by the Calculator -- 5.4 Percent Real. That's Not Bad. There Are All Sorts of Strategic Implications That Follow From Understanding That Stocks Provide Different Sorts of Returns Over Different Sorts of Time-Periods."




    Rob Bennett

  • "I Would Never Invest in Anything Without Having Any Idea What the Expected Return Is. For Instance, I Would Not Walk Into a Bank And Say "I'll Take One Certificate of Deposit, Please" WIthout Asking What Rate They Are Offering."



    Poster at Bogleheads Forum
    [Prior to the Ban on Honest Posting]

  • "I've Seen Things Said on Investing Boards That I Have Never Heard Said in Discussions of Any Non-Investing Topic. The Question of Whether Valuations Affect Long-Term Returns Is a Topic That Causes People More Emotional Angst Than Does Abortion or Impeachment Proceedings or the War in Iraq."



    Rob Bennett at the Bogleheads Forum

  • "It's Not Possible For Those Who Have Come to Believe That Stocks Are Always Best to Accept that Valuations Matter. The Two Beliefs Are Mutually Exclusive. If Valuations Matter, There Is Obviously Some Valuation Level At Which Stocks Are Not Best. The Two Paradigms Cannot Be Reconciled."


    Rob Bennett

  • "The Great Safe Withdrawal Rate Is Over. Rob Bennett Has Won.The Technical Evidence Supporting This Assertion Is Rock Solid."




    John Walter Russell,
    Owner of the Early Retirement Planning Insights Site
    [This Statement Was Put Forward on August 3, 2003.]

  • "I Am Afraid that the Emperor SWR [for "Safe Withdrawal Rate"] Has No Clothes."





    A Poster at the Early Retirement Forum
    [This Statement Was Put Forward on October 8, 2003.]

  • "I Cite You and John Walter Russell in My Paper as the Earliest and Strongest Advocates of This Approach [New School Safe Withdrawal Rate Research]."




    Wade Pfau, Professor of Retirement Income
    at The American College

  • "Dear Rob -- I Just Became Aware of Your Past Research in September. Since Then, I've Read Archives From Many Discussion Boards and Websites, and I Always Find Your Writing to Be Very Interesting and Intriguing."



    Wade Pfau, Professor of Retirement Income
    at The American College

  • "I Think Rob Bennett Did Provide An Important Contribution in Terms of Describing a Way for P/E10 to Guide Asset Allocation for Long-Term Conservative Investors. I Also Think He Was Right on the Issue of Safe Withdrawal Rates."


    Wade Pfau, Professor of Retirement Income
    at The American College

  • "What Studies Show This [That Long-Term Timing Doesn't Work]? In Particular, Are There Some Academic Studies That I Haven't Found Yet? That's All I Want to Know."




    Academic Researcher Wade Pfau at the Bogleheads Forum After His Own Search of the Literature Turned Up Not a Single Such Study

  • "Because the Precise Timing of This Mean Reversion Is Not Known in Advance, Expecting the Result to Happen in the Short-Term Will Not Be Possible. But Long-Term Investors Who Can Be Patient Can Wait for This Mean Reversion and Will Eventually Come Out Ahead."




    Academic Researcher Wade Pfau

  • "Your Work Is at Odds with the Ethos of the Board -- Here the Theme is John Bogle's Philosophy, Which Eschews Market Timing. This Board Came Into Existence to ESCAPE One Individual, the Very Individual With Whom You Have Openly Aligned Yourself."




    A Lindaurhead (to Researcher Wade Pfau)

  • "The Problem With Long-Term Market Timing Is That It Takes Too Long to Find Out If You Are Right or Wrong."






    A Poster at the Bogleheads Forum

  • "Why Is It Such an Odious Violation of the Tenets of Bogleheadism to Explore Whether Someone Who Has Enough Patience Might Be Able to Benefit from the Transitory Nature of Speculative Returns (the Idea That the P/E Ratio Eventually Ends Up Where It Started)?"




    A Poster at the Bogleheads Forum

  • "Let Me Explain Why I Posted About This Here. Valuation-Informed Indexing Has Had Critics for Years. But Until Norbert Did It In 2008, Nobody Seemed to Have Provided a Serious Investigation of It. I Couldn't Understand Why. That Bothered Me."



    Researcher Wade Pfau at the Bogleheads Forum
    (Prior to the Ban on Honest Posting)

  • "If You Really Don't Like Market Timing in Any and All Forms, You May Not See Any Point in an Empirical Investigation. You View Me as One of a Long Line of Hucksters Trying to Sell You Some Snake Oil. I Don't Want to Be Such a Person."



    Researcher Wade Pfau at the Bogleheads Forum
    (Prior to the Ban on Honest Posting)

  • "Having a Completely Ineleastic Demand for Equities Is a Bit Bonkers. No One Acts That Way with Life's Other Important Commodities. Campbell Advocates a Linear Valuations-Based Strategy so That You Wouldn't Be Making Big Changes. This Would Be Like Rebalancing But More Flexible."



    A Poster at the Bogleheads Forum

  • "The Whole Idea of Valuation-Informed Indexing Belongs to You. Do You Mind if I call the Paper 'Valuation-Informed Indexing'? I Would Give You Credit. I Have Been Toying With the Idea of Sending the Paper to the Journal of Finance, Which Is the Most Prestigious Journal in Academic Finance."


    Academic Researcher Wade Pfau, in an E-Mail to Rob

  • "I Definitely Need to Cite You as the Founder of Valuation-Informed Indexing, As I Have Not Found Anyone Else Who Can Lay Claim to That. Shiller Pointed Out the Predictive Power of P/E10 But Never Discussed How to Incorporate It Into Asset Allocation, As Far As I Know."




    Academic Researcher Wade Pfau

  • "I Tested a Wide Variety of Assumptions About Asset Allocation, Valuation-Based Decision Rules, Whether the Period Is 10, 20, 30 or 40 Years, and Lump-Sum vs. Dollar-Cost Averaging To Show That the Results Are Quite Robust to Changes In Any of These Assumptions."




    Academic Researcher Wade Pfau

  • "Yes, Virginia, Valuation-Informed Indexing Works!"




    Academic Researcher Wade Pfau
    (Wade Holds a Ph.D. in Economics from Princeton.)
    (The Buy-and-Hold Mafia Threatened to Get Wade Fired From His Job When He Reported His Findings.)

  • "I Wrote Up the Programs to Test Your Valuation-Informed Indexing Strategies Against Buy-and-Hold and I Am Quite Excited. You Say in the RobCast That VII Should Beat Buy-and-Hold About 90 Percent of the Time. I Am Getting Results That Support This."




    Academic Researcher Wade Pfau

  • "Never Underestimate the Power of a Dominant Academic Idea to Choke Off Competing Ideas, and Never Underestimate the Unwillingness of Academics to Change Their Views in the Face of Evidence. They Have Decades of Their Research and Academic Standing to Defend."




    Jeremy Grantham

  • "There's So Much That's False and Nutty
    in Modern Investing Practice."






    Warren Buffett

  • "Following Conventional Wisdom Has Led a Generation of Investors Down the Road to Ruin."






    Steve Hanke

  • "It Is Sad That the Idea That Price Doesn't Matter...Should Ever Have Been Seriously Considered".






    Andrew Smithers, Co-Author of Valuing Wall Street

  • "The Conventional Wisdom of Modern Investing Is Largely Myth and Urban Legend."





    Rob Arnott, Former Editor of
    Fianncial Analysts Journal

  • "Economics Is a Dog's Breakfast of Theoretical Ideas and Alleged Causal Relationships That Are At All Times Unproven and In Dispute."





    Terence Corcoran, Editor of National Post

  • "Since They Did Not Diagnose the Disease, There Is Little Popular Confidence That They Know the Cure. What If Economics Is, Actually, At the Same Level as Medicine Was When Doctors Still Believed in the Application of Leeches?"




    Gideon Rachman, Financial Times

  • "One of the Most Remarkable Errors
    in the History of Economics."



    Yale Economics Professor Robert Shiller
    (Referring to the Logical Leap from the Finding That Short-Term Price Changes Are Unpredictable to the Conclusion That the Market Sets Prices Properly)

  • "Everything Has Fallen Apart."






    Peter Bernstein, Author of Against the Gods
    (Referring to Old Views About How Markets Work)

  • "We Wonder Why Funds and Banks, Full of the Best and Brightest, Have Made Such a Mess of Things. Part of the Reason Is That We Have Taught Economic Nonsense to Two Generations of Students."




    John Mauldin, Thoughts From the Frontline

  • "Perhaps Most Scandalously, the Theory [Behind Buy-and-Hold] Remained Received Wisdom Long After Empirical and Theoretical Arguments Had Demolished It Within the Academic Community."




    John Authers, Financial Times

  • "I Love the Humans Dearly (the Title of the Book I Am Writing Is Investing for Humans: How to Get What Works on Paper to Work in Real Life) But They Can Be a Trial at Times. Hey! Helping the Humans Learn What It Takes to Invest Effectively Is Not All That Different From Being Married!



    Rob Bennett

  • "We Are Going to See Hearts Melt Following the Next Crash. I Will Be Working Side-By-Side With All of My Many Buy-and-Hold Friends to Rebuild Our Broken Economy."





    Rob Bennett

  • "Wow, I Did Not Realize You Had Achieved This Much Success and Had Many Devoted Believers/Followers. That’s Great, Then Ignore the Opposition. It Is Great to Have Opposition: That Means You Are Doing Something Right."




    Robert Savickas, Associate Finance Professor
    at George Washington University

  • "I Do NOT Believe I Know It All. I Believe That Shiller Discovered Something Very Important and It Appalls Me That More People Are Not Exploring the Implications of His Findings. My Aim Is To Launch a National Debate."




    Rob Bennett

  • "I Can See How Many Readers Would Be Put Off by the Somewhat Sensational/Scandalist Tone and Would Not Persevere to Read, Thinking You Are Losing Your Mind."




    Robert Savickas, Associate Finance Professor
    at George Washington University

  • "I LOVE Everything About Buy-and-Hold Other Than the Failure to Encourage Investors to Take Price Into Consideration When Setting Their Stock Allocations. That's a Mistake That Was Made Because Shiller’s Research Was Not Available at the Time The Strategy Was Being Developed."



    Rob Bennett

  • "Valuation-Informed Indexing Sounds Like a Real Thing. If It Is and I Can Thoroughly Understand It, Then It Will End Up In My Classrooms and in My Students' Minds (Of Course, With References to You and Wade)."




    Robert Savickas, Associate Finance Professor
    at George Washington University

  • "I Can Confirm Wade Pfau's Experience. Whenever I Send My Papers to the Financial Analysts Journal or Similar Traditional Journals, I Get Rejected."





    Joachim Klement, CIO at Wellershoff & Partners

  • "As a Fan of Thomas Kuhn's The Structure of Scientific Revolutions, I Know That Progress Can Be Frustratingly Slow and What Is Typically Needed Is Either a Crisis or the Ascent of a New Generation of Scientists Who Did Not Build Their Careers on the Old Models and Theories."




    Joachim Klement, CIO at Wellershoff & Partners

  • "We Trace the Deeper Roots [of the Financial Crisis] to the Economics' Profession's Insistence on Constructing Models That, By Design, Disregard the Key Elements Driving Outcomes in Real World Markets."




    Knowledge@Wharton

  • "Rob Gets Himself So Worked Up Over What Someone Else Is Doing With Their Own Money and Not Bothering Rob in the Least. As Long As They Aren't Knocking on Your Basement Door, What Do You Care? They Are Happy and Content. Leave Well Enough Alone and Focus on Your Own Account."


    Dab, One of the Greaney Goons

  • "I've Been on Forum Since the BBS Days and I Think Rob is Special. He Could Be an Internet Meme If He Put Some Effort Into It. Someday, He Will Realize That the Only Thing He's Good At Is Being an Epic Loser. He Just Needs to Embrace That Idea and Run With It. Watch Out, LOLCats, Here Comes Pathetic Guy!"


    Wabmaster, One of the Greaney Goons

  • "Your Lies Are Not Even in the Realm of the Possible, Much Less Actually Credible, Much Less Actually True."






    Drip Guy, One of the Greaney Goons

  • "I'm Your Friend. I Am Not a Boil on Your Ass."






    Rob Bennett, In a Response Comment
    to One of the Greaney Goons

  • "You Guys [the Greaney Goons] Are the Same Jokers Who Have Done This Before, Sparring with Rob Over Nonsensical Issues On This Site and Others, Leveling Personal Attacks, and You Don't Even Use Real Names! Rob Is Entitled to His Opinion, But the Fact That You Challenge Every Jot and Tittle of What He Says Makes It Clear You Have An Unholy Agenda. Please Take It Elsehwere."

    Kevin Mercadante,
    Owner of the Out of Your Rut Site

  • "Rob, Take This As Friendly Advice. You're a Smart and Articulate Guy and You Could Be Making Valuable Contributions to This Discussion. I've Dealt with the Mentally Ill Before and I've Found That They Sometimes Can Be Reasonable If Gently Redirected."



    Goon Poster

  • "Always Remember Others May Hate You, But Those Who Hate You Don't Win Unless You Hate Them, and Then You Destroy Yourself."





    Richard Nixon

  • "I’m a Numbers Guy. And I Believe I Understand Rob’s Thesis, that Future Returns, Over the Next Decade, Have a Tight Inverse Correlation to the PE10 for the Starting Point. Remember, Correlation Doesn’t Need to be 100%, Only That There’s a Bell Curve of Potential Outcomes that Shift Meaningfully Based on the Input."


    Owner of Joe Taxpayer Blog

  • "What a Difference a Threat to Get the Father of Two Small Children Fired From His Job Has on an Investing Discussion, Eh? Long Live Buy-and-Hold! It’s Science! With a Marketing Twist!"




    Rob, Referring to the Wade Pfau Matter

  • "I Respect Rob and His Analysis. He's Bright, Energetic and Passionate. [The Goon Stuff] Is Really Nonsense. I Enjoy a Thought-Provoking Conversation With People I Respect."





    Owner of Joe Taxpayer Blog

  • "The Fact that Shiller is a Proponent of the Approach Takes it from a Fringe View to Mainstream, in my Opinion."






    Owner of Joe Taxpayer Blog

  • "I Have had Academic Researchers Tell Me That They Dream of the Day When They Will be Able to do Honest Research Once Again. I Have had Investment Advisors Tell me That They Dream of the Day When They Will be Able to Give Honest Investing Advice Again."



    Rob Bennett

  • "Let’s Call a Spade a Spade, Shall We? Wade Pfau Stole Your Research and Put His Name on it, Throwing You Just a Tiny Crumb of Acknowledgement to Ward Off a Lawsuit. He’s Profiting Handsomely By His Theft, Leading a Charmed Life, Widely Published, Widely Respected. While Rob Bennett Continues to Toil in Total Obscurity. It’s So Incredibly Unfair, I Think If It Happened to Me, It Could Actually Drive Me Insane."

    One of the Greaney Goons

Navigation Menu 
  • About Us
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  • Blog
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    • 20 Dangerous Money Myths — They Think We’re Stupid!
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  • Valuation-Informed Indexing
    • Why Buy-and-Hold Investing Can Never WorkThe Buy-and-Holders are not evil people. They are smart and good people. They made a mistake. They were so excited about their early findings that they experienced cognitive dissonance when the mistake was revealed. They painted themselves into a corner and now don’t know how to get out. This article explains how the mistake was made and how we came to find ourselves in the trap we are in today.
    • About Valuation-Informed IndexingBackground, Basics and Links to Materials Giving More In-Depth Information
    • The Stock-Return PredictorStocks are NOT always worth buying. That’s a Wall Street lie! This calculator performs a regression analysis on the 140 years of historical stock-return data to reveal the most likely annualized 10-year return for stocks starting from any valuation level. It essentially tells you the price tag for stocks so that you can know whether they are worth buying or not.
    • The Retirement Risk EvaluatorRob pointed out the errors in the Old School safe withdrawal rate studies in May 2002. That post kicked off the biggest controversy in the history of the internet. Today, The Wall Street Journal, Smart Money and The Economist all acknowledge that Rob had it right all along. But they still don’t provide calculators that give the right numbers! The safe withdrawal rate is not a constant number but VARIES with changes in the valuation level that applies on the day the retirement begins. This calculator provides all the details you need for effective planning.
    • The Investor’s Scenario SurferI have run this calculator hundreds of time. it is in my assessment the most powerful tool for learning how stock investing works available today. You have the option of choosing a new stock allocation in each year of a realistic 30-year sequence of returns. You can compare your results with what you would have achieved with a Buy-and-Hold strategy. You will find that Valuation-Informed Indexing strategies yield larger portfolios in 90 percent of your tests of the concept. What matters is what happens in the long term! This tool tells you what strategies give the best results in the long term.
    • The Investment Strategy TesterIf you are worried about losses you have suffered in recent years, you can use this tool to learn what you need to do to get back on the track to early financial freedom. The Strategy Tester lets you design a strategy you want to check out. Then it runs the hundreds of Scenario Surfer tests to see how the strategy compares with other possibilities you identify. The color-coded graphic gives you a good idea of what the odds are of good and bad outcomes for up to four investing strategies at a time.
    • The Returns Sequence Reality CheckerWe all root for price gains in the stock market. Should we? This calculator says “no!” Today’s price increase lowers tomorrow’s price increase. This has been so for the entire history of the market. So the question is whether you should want to pay more for stocks now or later. You are far better off paying more later because that means you get to acquire more gain-producing goodness earlier in life and thus you will enjoy more compounding return magic. This one will blow your mind. It’s a very simple concept but a highly counter-intutive one and one that will someday soon change how we all think about stock investing.
    • Nine Valuation-Informed-Indexing Portfolio Allocation StrategiesThis is the most popular of the 200 hour-long RobCasts that I provide at the site. It explores the nuts-and-bolts aspects of Valuation-Informed Indexing — How often do you change your allocation and by how much?
  • The Buy-and-Hold Crisis
    • Academic Researcher Silenced by Threats to Get Him Fired From His Job After Showing Dangers of Buy-and-Hold Investing StrategiesMy aim is to get this story reported on the front page of the New York Times. On the day that happens, all the nastiness will stop. We will all be working together to bring the economic crisis to an end and to enter the greatest period of economic growth in our history.
    • Academic Researcher Silenced By Threats to Get Him Fired From His Job After Showing Dangers of Buy-and-Hold Investing Strategies — Teaser VersionThis is a briefer version of the same article, the article that I believe is the most important one that I have written in my 30-year journalism career. I believe that the story told at this web site is the most important economic and political story of any of our lifetimes and this article sums up the key points in one little package of dynamite. If Buy-and-Hold were a legitimate strategy, every Buy-and-Holder would be ashamed to learn that even one academic researcher was threatened. We cannot move forward so long as the intimidation tactics of the Buy-and-Holders dominate all discussions of what works in stock investing. I use this short version of the article in my e-mail campaigns aimed at getting researcher and stock advisors and bloggers and journalists and policymakers involved in our effort to open the internet up to honest posting on ALL investing topics. Please help get others involved if you can. We are all in this together!
    • Corruption in the Investing Advice Field — The Wade Pfau StoryThis article provides links to all of my reports on my 16 months of correspondence with Academic Researcher Wade Pfau, the collaboration that produced the research we co-authored that shows millions of middle-class investors how to reduce the risk of stock investing by 70 percent (Ssshh! The Wall Street Con Men don’t want this one getting out!) If you retain doubts re whether Valuation-Informed Indexing is a real thing, looking over the materials available at this page and then reading a few of the reports that strike you as particularly important will dispel them. I believe that Wade will someday win a Nobel prize for the work he did here. The reports show his own skepticism and his transformed into excited BELIEVER in the Valuation-Informed Indexing concept.
    • The Bennett/Pfau Research Showing Middle-Class Investors How to Reduce the Risk of Stock Investing by 70 PercentYou do not have to take on a large amount of risk to obtain good returns. Why should you? When you buy an index fund, you are buying a tin share in the productivity of the U.S. economy. The U.S. economy has been sufficiently productive to support an average annual stock return of 6.5 percent real for 140 years now. So that’s what you can expect if you invest in a sensible way. But you are not being sensible if you follow a Buy-and-Hold strategy. You MUST consider price when buying stocks just as much as you must consider price when buying anything else. This is the most important investing research published in 30 years. It frees all of us from dependence on Wall Street “experts.”
    • Buy-and-Hold Caused the Economic CrisisThe first step to curing an illness is coming up with a correct diagnosis. What we have been hearing thus far about what caused the economic crisis is Democrats yelling at Republicans and Republicans yelling at Democrats. This political attack-game gibberish will not cut it. We borrowed huge amounts of money from our future selves to finance the insane bull of the late 1990s. Now we are our future selves! Now we are paying the price! It hurts to know we caused this. Buy you know what? We never have to suffer through something like this again once we acknowledge the realities.
    • The True Cause of the Current Financial Crisis — Questions and AnswersYale Economics Professor Robert Shiller predicted the economic crisis in his book “Irrational Exuberance,” published in March 2000. How did he know? Shiller knows how stock investing works. He knows that the Pretend Money created during times of overvaluation ALWAYS disappears over the course of 10 years or so. When that money disappears from our portfolios, we cannot afford to spend as much. So tens of thousands of businesses fail and millions lose their jobs. We avoid economic crises by avoiding out-of-control bull markets. We avoid out-of-control bull markets by letting investors know the truth — When stocks are selling at insanely inflated prices, they offer a very poor long-term value proposition. The lies that Wall Street tells about stocks are destroying out free-market economic system.
    • Investing Discussion Boards Ban Honest Posting on ValuationsLots of people hate me. There was a time when I was receiving fresh death threats in my e-mail inbox on an almost daily basis. But lots of people love me too. Thousands of my fellow community members have told me that I am the first person who ever described how stock investing works in a way that truly hangs together. This article offers 101 comments of my fellow community members asking the Buy-and-Holders to knock off the funny business and permit civil and reasoned discussion of the last 30 years of peer-reviewed academic research. This article reveals the emotionalism of the Buy-and-Holders and it is the fact that Buy-and-Hold causes such emotionalism that tells me that it can never work in the long run.
    • Wall Street Journal Calls Buy-and-Hold a “Myth,” Endorses Valuation-Informed IndexingLot of smart people know that Buy-and-Hold is a big pile of smelly garbage. They are afraid to speak out today because they know what will happen to them if they do. But they try to position themselves for the post-next-crash period, when “Buy-and-Hold” will be an obscene phrase. Bret Arends tells us that the Wall Street Con Men “are leaving out half the story.” Precisely so. The purpose of this web site is to let you in on the half of the story that the Wall Street Con Men have been keeping from you for 32 years now.

“It Is This Shock That Has Caused Bengen’s Conversion to Short-Term Market Timing”

November 6, 2008 By Rob

An earlier blog entry described the background of my recent correspondence with Michael Kitces on safe withdrawal rates (SWRs). Set forth below is the text of an e-mail that I sent to Michael on November 6.

Michael:

I hope things have been going well with you since we last talked.

You noted in one of your e-mails from August that:  “I’m moderating a panel session at the NAPFA  Northeast Regional conference in Hershey, PA, this November – and the topic is entirely about safe withdrawal rates, and my panelists will be Bill Bengen and Jon Guyton (arguably THE two leading researchers on SWRs from the financial planning community). One of my goals for the  session is to invite both of these individuals – who are both researchers and planning practitioners who work with clients – about how their views may have changed over the past 8 years of market history and in their work with clients. I’m very curious to see how the session goes!”

There’s an article today at Bloomberg.com revealing Bengen to be a recent convert to short-term market timing!

Juicy Excerpt: Bengen also is keeping his clients out of equities. Normally, he says, he believes in traditional asset allocation, but “this is one of those rare instances when duck-and-cover is appropriate.”

Yucko! This is not long-term market timing (which I very much advocate). This is short-term timing, the bad kind of market timing. Do you share my reaction? Do you believe, as Bengen now does (I cannot help wondering whether his belief in the merits of short-term timing is the result of a recent conversion caused  by the price crash) that there are circumstances in which short-term timing can pay off?

It is of course not my intent to mock Bengen. As always, my intent is to point out the flaws of the Passive Investing model and of the Old School SWR methodology, which is the product of the Passive Investing mindset.

Have you seen the numerous articles in which people like Buffett and Bogle and Malkiel have been urging middle-class investors to hold their stocks or to buy more? The general point that they make is that, if you liked stocks when they were priced far higher than they are today, you should love them now. That’s of course true. But it ignores the emotional reality that Buffett and Bogle and Malkiel were not warning people of the dangers of going with high stock allocations at the prices that applied 12 months ago. People have been shocked by the size of the price drop because they were not warned of its inevitability  by the “experts.” It is this shock that is the problem. It is this shock that has caused Bengen’s conversion to short-term market timing (in my view, of course).

Excessive emotion in one direction leads to excessive emotion in the other direction. Leading people to believe that there is no need to lower their stock allocations when prices are dangerous leads to people lowering their stock allocations TOO MUCH when prices drop to reasonable or sub-reasonable levels. Passive Investing does not work. That’s the bottom line.

Bengen is viewed as an “expert” in this field. So are Buffett, Bogle, and Malkiel. Yet he is doing precisely the opposite of what Buffett, Bogle and Malkiel are advising middle-class investors to do. What are  middle-class investors to believe? If the “experts” cannot get their story straight, how are the middle-class investors to make sense of what they are saying?

The problem (in my view!) is that the “experts” continue to ignore or hush up the findings of the academic research of recent decades that shows that the Efficient Market Theory is nonsense. Humans are NOT rational actors. Humans are BOTH rational actors AND emotional actors. Changes in investor emotion are evidenced in changes in stock valuations. Valuations matter. Valuations affect long-term returns. It is not possible to calculate SWRs accurately without making an adjustment for the valuation level that applies at the start date of the retirement in question.

My view is that Bengen is wrong about short-term timing, but that Buffett (Buffett less so than the other two), Bogle and Malkiel are wrong about Passive Investing and that Bengen’s errors are largely the result of his too easy acceptance of the errors of these other “experts.” The bottom line? None of us can be true “experts” until the flaws of the Passive Investing model that were discovered decades ago are widely discussed by all who aspire to expertise in this field. We learn together by talking things over amongst ourselves and we cannot get to square one until we hear some straight talk from the  big names in the field. We are all capable of better. We are all holding ourselves back by failing to work up the courage to bring the most important questions to the table.

I encourage you to ask Bengen about his conversion to short-term timing and about his dispute on this point with Buffett, Bogle and Malkiel. In the event that you do so, please let me know of his response. The purpose here is of course not to embarrass Bengen. It is to learn from him and to help him learn from us. The first step in the learning process is acknowledging mistakes of the past. The Old School SWR studies are analytically invalid and need to be corrected.

I hope that you will take these words in the spirit in which they are intended, Michael. I wrote them strong because I believe that the issues are important and that the financial damage that is being done by our failure to take effective action to let people know of what we have learned in recent years is causing more and more human misery as time goes on. Bengen’s conversion to short-term timing tells us something important about Passive Investing. It tells us that it does not work in the real world.

Rob

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Filed Under: Bill Bengen & VII Tagged With: Michael Kitces, SWRs

Comments

  1. John Walter Russell says

    November 6, 2008 at 3:12 pm

    What Mr. Bengen lacks is a structure for getting back into the market. He is running for cover, which is OK, given what we have learned.

    Valuation Informed Indexing and Scenario Surfer experience help us understand what to do. This is information that financial planners need right away.

    Have fun.

    John Walter Russell

  2. Schroeder says

    November 6, 2008 at 4:10 pm

    Rob, you wrote:

    “Have you seen the numerous articles in which people like Buffett and Bogle and Malkiel have been urging middle-class investors to hold their stocks or to buy more?”

    Have you been following the advice of Buffet, Bogle and Malkiel by buying stocks? If yes, what is your stock allocation now?

    Schroeder

  3. Rob says

    November 6, 2008 at 4:39 pm

    what is your stock allocation now?

    I put forward hundreds of posts dealing with my personal financial circumstances at the various Retire Early and Indexing boards in the days before the various bans on honest posting were put into effect, Schroeder. I do that because I see value in it. One of the great benefits of the internet discussion-board communications medium is that many community members are willing to share specifics of their plans. That helps us all to understand the underlying realities and how to implement them in the real world.

    One of the big downsides of the new communications medium is the damage that is done to healthy community interactions by abusive posters. The Goons of course feel a great deal of shame because of the damage they have done to our boards. One of the things they have done to cover up the damage they have done is to attack me personally and to try to intimidate me personally. One strategy that has been employed is to post false claims about my personal financial circumstances and to get numerous Goon posters to pretend that these false claims are accurate. Thousands of false claims about my personal financial circumstances have been posted at various places on the internet.

    These false claims hurt people who are trying to learn about the realities; they make it impossible for people to make sense of things. It of course was never my intent to do anything to cause such human misery. When community members try to correct the false claims, they are terrorized by the Goon posters. All of this is ugly stuff. I approve of none of it.

    I will not help the Goons to cause more busted retirements with their deception and intimidation posts. I have called for a lifting of the ban on honest posting on SWRs and other valuation-related topics. When the ban is lifted, I will resume talking about my personal circumstances and I am confident that hundreds of other community members who have been intimidated into silence will also resume posting constructively.

    The fact that the “defenders” of the Old School studies have felt a need to engage in such tactics is itself important evidence that the Old School studies are analytically invalid. It shows that the “defenders” of the Old School studies have given up any hope of making a civil and reasoned case for their position. The sooner that the ban on honest posting is brought to an end, the better for every single community member. That’s true even for the Goons, in my assessment.

    Bans on honest posting are shameful to all who play a role in enforcing them and even to all who participate in communities that have imposed them and who fail to take action to have them lifted. That’s my sincere take.

    Rob

Browse Bill Bengen & VII

  • "It Is This Shock That Has Caused Bengen’s Conversion to Short-Term Market Timing" 3 Comments

    An earlier blog entry described the background of my recent correspondence with Michael Kitces on safe withdrawal rates (SWRs). Set forth below is the text of an e-mail that I sent to Michael on November 6. Michael: I hope things have been going well with you since we last talked. You noted in one of your e-mails from August that:  "I’m moderating a panel session at the NAPFA  Northeast Regional conference in Hershey, PA, this November - and the topic is entirely about safe…

  • Wade Pfau: "Your Comment About Mr. Bengen Causing Failed Retirements Is Too Harsh" 3 Comments

    Set forth below is the text of a comment that Wade Pfau posted to a recent blog entry here: Hi Rob, I know you like getting to the point, but I think your comment about Mr. Bengen causing failed retirements is too harsh. Just a couple of things to keep in mind: 1. As you know, he was the one to point out that 7% is not safe because of sequence of returns risk. In that regard, he made a very positive contribution by bringing expectations down from 7% to 4%. 2. He notes that 4% is the…

  • My E-Mail to Bill Bengen 6 Comments

    William Bengen is a financial planner based in El Cajon, California. He is well known for his work as one of the early researchers using the Old School safe-withdrawal-rate (SWR) methodology for retirement-planning research. Set forth below is the text of an e-mail that I sent to Bill on November 24, 2008: Mr. Bengen: My name is Rob Bennett. It's possible that Michael Kitces mentioned my name when you had dinner with him recently at the SWR conference in Hershey, PA. I am a journalist…

  • Bill Bengen: "Buy-and-Hold In These Environments Is an Invitation to Disaster" 155 Comments

    California Financial Planner Bill Bengen, the author of an influential Old School safe withdrawal rate study (it was Bengen's study that popularized the infamous "4 percent rule" that has caused millions of middle-class investors to set up wildly irresponsible retirement plans that are now in the process of going bust), was interviewed in the December issue of the Financial Planning Journal. The interview is titled William Bengen on Risk, Volatility, and Safe Withdrawal Rates in Today's…

  • Bill Bengen: " For Those Who Wait for a Low Enough CAPE to Invest Fully in Stocks, It Has Been a Frustrating 25 Years, As CAPE Has Been Below its Average of About 16 Only About 25% of the Time During That Span (If That Much). Today, of Course, CAPE Stands at More Than Twice its Long-Term Average. It Will Be Interesting to See If It Does Indeed “Mean Revert”, and Even Drop Below its Long Term Average." 0 Comments

    Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Uh oh, Rob. Bill Bengen points out the research and data that says you are wrong and that VII is a failure: “I have not studied in great detail the correlation between Shiller CAPE and withdrawal rate. However, Michael Kitces, a celebrated financial planner who has also done some important research in the area of withdrawal rates, produced an interesting chart…

  • "90 Percent of the Population Believes That Buy-and-Hold/Get Rich Quick Is a Real Thing. Even Though That Group Might Oppose Death Threats in the Abstract, They Support the Continued Promotion of Get Rich Quick/Buy-and-Hold Strategies More Than They Oppose Death Threats." 2 Comments

    Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: If the police had actual links, then they would have gone after someone.  With that said, you can post the links here for all to see and then you will have all the support you could ever need.  Go ahead and post the links.  We will wait. The policeman asked me whether I believed that you were actually going to kill me. I said that it was my belief that you were…

  • "Those...Investing in Equities [Hold] Securities Whose Future Earning Power Is Completely Unpredictable" 0 Comments

    Tuesday's blog entry set forth the text of an e-mail that I recently sent to Bill Bengen, a financial planner based in California who is a prominent Old School safe-withdrawal-rate researcher. Set forth below is Bill's response, which was dated November 25, 2008: Dear Rob: I actually have been using in my practice results Michael Kitces published recently which relate withdrawal rates to the 10-year trailing S&P 500 index P/E. It filled a gap in my methods and makes a lot of sense. I…

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Browse Rob Bennett

  • “You Don’t Have to Take Anybody’s Word for Anything. It Wouldn’t Take You 10 Minutes to Pull Up Greaney’s Study for Yourself and See Whether It Contains an Adjustment for the Valuation Level That Applies on the Day the Retirement Begins.”

    Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: You claim to have all these supporters, yet you can’t even get one of the them to post anonymously on this site. You claim that threats were made, yet you can’t post just one link here. Everything you say requires us to just take you word for it. In many cases, we would also have to believe that there is also a mass conspiracy and that all these experts out there are liars. You don’t have to take anybody’s word for anything, Anonymous. It wouldn’t take you 1o minutes to pull up Greaney’s study for yourself and see whether it contains an adjustment for the valuation level that applies on the day the retirement begins. People used that study to plan their retirements. I was there. They talked about it every day at the old Retire Early board. Rob Related Posts“If Greaney Included Language Describing the Retirement Risk Evaluator, No One Could Accuse Him of Deception, Could He? Greaney Would Be Shifting the Burden from Himself to the Person Reading the Study. It’s Very Different When Greaney Does Everything in His Power to Block People from Learning What the Last 34 Years of Peer-Reviewed Research Says. That’s the Sort of Thing That Will Sway a Jury to Vote to Put You Away.”Buy-and-Hold Goon to Rob: “I Think You Dwell on John Greaney As He Has Publicly Embarrassed You in So Many Ways and You Have Always Wanted Revenge.”Buy-and-Hold Goon to Rob: Just Because You Were Able to Browbeat Wade Into Emailing the Trinity Guys Doesn’t Mean I’ll Do Your Bidding Too. Set Up Your Own Damn Forum.”“I Can Report That Greaney’s Retirement Study Caused a Good Number of People at the Retire Early Board to Go With Lower Withdrawal Rates Than They Would Have Gone With Had Greaney Not Posted and Promoted His Study. That’s a Positive. I Can Honestly Say That That’s the Case. So I Have No Problem Doing So.”“Part of the Job is to Describe the Pressures that Caused so Many Generally Good and Smart People Either to Participate in the Cover-Up or at the Minimum Tolerate It. I Post These Goon Conversation Blog Entries to Help People Come to a Full Understanding of What Happened.”Buy-and-Hold Goon to Rob: “No One Can Have […]

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  • “A Nation Cannot Survive Indefinitely If There Is No Means to Communicate to Millions of Investors What the Peer-Reviewed Research Teaches Us All About How Stock Investing Works in the Real World. The People of the United States Are Going to Find a way to Overcome You Goons. Because We Have No Choice.”

    Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: So you can’t name just one person and provide a link, yet Wade Pfau has denied that there was ever any threat made against him.  So the whole premise is false to start with.  When you send out 30,000 emails making the claim, you were just spreading something that lacks any proof. The guy spent 16 months of his life studying whether long-term market timing always works or not. He sent me scores of e-mails describing his excitement over our findings. He posted numerous articles at his web site summarizing our work. He contributed to discussions about it at the Bogleheads Forum on many occasions, He sent our paper to several peer-reviewed journals and had it published in one. Then you Goons threatened to destroy his career unless he took the articles he had written down from his web site and agreed to stop doing honest work on these matters in the future. And he wrote to me and told me that he was scared of you and that one of the journals he had contacted had told him that they had received hate mail from Buy-and-Holders. He told me that he thought that he might lose his job if he continued doing honest work and that he thought that the best thing he could do was to keep quiet. That’s extortion, Anonymous. And of course this is not the only case. There’s the fact that I was banned from many sites where hundreds of posters have expressed a desire to be able to hear what I have to say and despite the fact that I have never once in 19 years violated a published posting rule. There’s the fact that I have had financial advisers call me on the telephone because they want to pick my brain on Valuation-Informed Indexing but they ask me not to tell anyone that they have spoken to me. Rob Arnott said that he would like to help me but that he is dealing with too much “controversy” of his own because he has spoken honestly about the effect of stock valuations on long-term returns. Bill Bernstein said that the safe withdrawal rate studies were off by two full percentage points at the top of the bubble but then never […]

    (19 Comments)

  • “There’s a Difference Between Knowing That Something Is Wrong and Wanting to Get Involved to Fix It. The Price for Getting Involved re This Matter Is Very High.”

    Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Name just one person that agrees with you about Wade being threatened and show us the link. I’ve spoken to many people about what happened to Wade Pfau. Everyone who I told the story to found it shocking. No one has ever questioned whether I was telling the truth. I sent e-mails to 30,000 academic researchers telling them what happened to Wade. Several wrote back that this was below any acceptable ethical standard. There’s a difference between knowing that something is wrong and wanting to get involved to fix it. The price for getting involved re this matter is very high. Shiller published his research in 1981. So the cover-up has been going on for 40 years. There are a lot of powerful and wealthy people who do not want the general public to learn what has been going on. But what happens after the next price crash? If Shiller is right, many trillions of dollars of irrational exuberance will disappear into thin air. People will not be able to spend when they have lost that much money. Hundreds of thousands of businesses will go under. Millions of people will be thrown out of work. Political frictions will worsen. Will there be a few brave and good people who will work up the courage to speak out then? I think there will be. We are a good people, Anonymous. We are not perfect or we would have got to work rewriting the textbooks soon after Shiller published his research. But we are basically good. That’s why we have laws against extortion, That’s why we have laws against threats of physical violence. We will as a society do the right thing in the end. Or so this Rob Bennett fellow believes, in any event. There’s always that one-in-a-hundred possibility that I am wrong, We will just have to wait to see how things play out to find out for sure. My best and warmest wishes to you and yours. Rob Related Posts“The Fact That Wade Pfau Won’t Speak to Me Today Definitely Tells a Tale That Needs to Be Widely Told.”“If Greaney Included Language Describing the Retirement Risk Evaluator, No One Could Accuse Him of Deception, Could He? Greaney Would Be Shifting the Burden from Himself to […]

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  • Valuation-Informed Indexing #539: We Don’t Acknowledge Our Get Rich Quick Urge Because It’s Irrationality Shames Us

    I’ve posted Entry #539 to my weekly Valuation-Informed Indexing column at the Value Walk<I’vesite. It’s called We Don’t Acknowledge Our Get Rich Quick Urge cause It’s Irrationality Shames Us. Juicy Excerpt: The psychological block is the shame we feel over what we have done. The damage done by a bull market is small in its early years. So the shame felt over it is limited. But as prices rise higher and the risk attached to them grows greater, the shame we feel over our irrational behavior grows stronger. When a bull market has been in place for a long time (this one has been in place for a longer time than any earlier bull market in U.S. stock market history), the shame grows so strong that discussion of the dangers of bull markets becomes taboo. Irrational exuberance is fun in its early days, In its later days, it becomes something that we cannot bear to look at closely. Related PostsValuation-Informed Indexing #265: P/E10 Permits Us to Quantify Investor EmotionValuation-Informed Indexing #267: Take Valuations Seriously and You Will Discover Things That You Were Not Initially Even Seeking to DiscoverValuation-Informed Indexing #261: Unlike Long-Term Returns, Short-Term Return Sequences Are Highly UnpredictableValuation-Informed Indexing #270: A Critic of Valuation-Informed Indexing Offers a Concise Case for Why Buy-and-Hold Is SuperiorValuation-Informed Indexing #262: The Unpredictability of Short-Term Return Sequences Masks the Predictability of Long-Term ReturnsValuation-Informed Indexing #253: What a Journalist Can Tell You About Stock Investing That an Expert Cannot

    (11 Comments)

  • “My Answer Is to Do Everything We Can to Make the Buy-and-Holders Feel Better About the Mistake They Made By Pointing Out the Dozens of Powerful Insights That They Developed and Shared With Us All While Being 100 Percent Unwilling to Continue Engaging in Criminal Behavior to Keep the Cover-Up Going.”

    Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “Because, if someone says that one of the things that I say is right, they know that they will be led by logic to saying that all of the things that I say are right. “ And to the opposite, when we see you say several things that are clearly wrong, then we look at everything you say with suspect and doubt. Of course. But there has never been one time in 19 years in which you have shown that I got something wrong. The only point you make is “well, other people don’t say these things.” That’s so. But you never consider the insane level of hostility you show when people do say these things (and there have been many, many occasions in which they have). The hostility silences people. You were hostile from the moment that I pointed out that the Greaney retirement study lacks a valuation adjustment. Insanely hostile. And entirely without cause. I have been proven 100 percent correct in my claim that that Greaney retirement study lacks a valuation adjustment. But it has not been corrected to this day. And the hostility has continued. If anything, it has increased. So we don’t have people saying it all the time. People are afraid to do so. But on every occasion on which someone has calmly looked at the study to determine whether or not it contains a valuation adjustment, the person has discovered that I was right all along on a very important point. There has never been any intellectual debate. Every piece of evidence that we have looked at has lent support to the claim that market timing is always required. But, no, you don’t often hear people say that. The problem is not that it is not true or that the truth is not a terribly important one. The problem is that we have thousands of people who have built careers around the idea that market timing is not required or might not even always work. So there is huge institutional pressure to keep Shiller’s Nobel-prize-winning findings covered up. The other side of the story is that, if Shiller is right that more than half of the value of today’s market is just irrational exuberance with no lasting economic substance, […]

    (16 Comments)

  • “I Have Never Seen a Board or Blog That Banned Posting by Buy-and-Holders. I Have Seen Many That Ban Honest Posting on Shiller’s Nobel-Prize-Winning Research. That’s Why Today’s CAPE is 36. People Are Only Hearing One Side of the Story.”

    Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: I think every board and blog should be open to my ideas and opinions, but that is not the way that things work. Every investing board and blog should certainly be open to your ideas and opinions on investing. That’s the entire purpose of boards and blogs — to provide places for people to share their thoughts. I have never seen a board or blog that banned posting by Buy-and-Holders. I have seen many that ban honest posting on Shiller’s Nobel-prize-winning research. That’s why today’s CAPE is 36. People are only hearing one side of the story. Not good. Rob Related Posts“If One Were in an Especially Charitable Mood, One Could Even Say That Greaney Was the Victim of an Exceedingly Odd Set of Circumstances in Much the Same Way That I Was.”“If Greaney Included Language Describing the Retirement Risk Evaluator, No One Could Accuse Him of Deception, Could He? Greaney Would Be Shifting the Burden from Himself to the Person Reading the Study. It’s Very Different When Greaney Does Everything in His Power to Block People from Learning What the Last 34 Years of Peer-Reviewed Research Says. That’s the Sort of Thing That Will Sway a Jury to Vote to Put You Away.”Goon Poster to Rob: “You Have Stated What You Think Are Problems. People Have Responded As to How They Disagree. People Eventually Got Angry Because of Repetitive Comments Going in Circles.”“It Would Be Better Not to Have Any Investing Boards Than to Have Them and to Ban Honest Posting on the Past 38 Years of Peer-Reviewed Research at Them. You Will Say That That’s a ‘Strident’ Viewpoint or Some Such Thing. But I Don’t Think So. I Think It Is Common Sense. If We Were All Thinking Clearly, I Don’t Think There Would Be a Single Voice Raised in Dissent to the Proposition That We All Need to Feel Free to Post Honestly for Any of Our Boards to Serve Any Good Purpose.”“Set Up a Debate at the Bogleheads Forum. We’ll Make History.”Buy-and-Hold Goon to Rob: Just Because You Were Able to Browbeat Wade Into Emailing the Trinity Guys Doesn’t Mean I’ll Do Your Bidding Too. Set Up Your Own Damn Forum.”

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  • “Where Would We Be As a Society If Doctors Were Not Permitted to Discourage Their Patients From Smoking Because the Tobacco Companies Felt That They Could Make More Money If People Were Kept in the Dark re the Cancer Risks?”

    Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: You are nothing like Galileo.  We live in a world in which we have all the information that we need at our finger tips. Having access to information and making good use of it are two different things. Smokers know that smoking causes cancer. Alcoholics know that drinking is ruining their lives. They have information coming out of their ears. What they need is to develop the emotional calm to make use of what they know. Investors know that they are hurting themselves when they bid stock prices up to crazy levels. But they want to! Just like smokers want to smoke and alcoholics want to drink. Shiller’s research will change the world when as a society we give ourselves permission to talk about it on every discussion board and blog on the internet. When we hear somebody say that he is thinking of failing to engage in market timing (price discipline!), we need to take him aside and show him what the research shows happens to people who travel down that dark road. If we are going to have an investment advice field, we need to permit people to do honest work in it. Where would we be as a society if doctors were not permitted to discourage their patients from smoking because the tobacco companies felt that they could make more money if people were kept in the dark re the cancer risks? Or if there were no Alcoholics Anonymous because someone tool a survey of alcoholics and found that they possess a strong urge to continue to drink to excess? Sometimes you have to extend a hand to a struggling fellow human. I believe that we should permit honest posting re Shiller’s research. Rob Related PostsValuation-Informed Indexing #257: It’s Not Possible That Valuations Matter Only at the Margins“The Tobacco Industry Had a Lot of Money Riding on Keeping People in the Dark About What the Research Showed. And They Used Their Financial Resources to Do So. But Word Had to Get Out Sooner or Later. We Live in a Free Society. These Cover-Ups Cannot Last Indefinitely. Trying to Keep Them Going Is a Doomed Enterprise.”“When Research Was Published Showing That Smoking Causes Cancer, the Tobacco Companies Considered That Abusive and Did Everything in […]

    (4 Comments)

  • Valuation-Informed Indexing #538: Every Investor Should Know the Basics of How the Stock Market Works

    I’ve posted Entry #538 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Every Investor Should Know the Basics of How the Stock Market Works. Juicy Excerpt: Trillions of dollars of market value were lost in the space of a few days during the 2008 economic crisis. There was one fellow on a discussion board who asked: “Where did all the money go?” I loved that because it is such an obvious and important question. It is my belief that fewer than one in ten of all investors know the answer to that question and that no one should invest one dollar in the stock market until she does. Related PostsValuation-Informed Indexing #267: Take Valuations Seriously and You Will Discover Things That You Were Not Initially Even Seeking to DiscoverValuation-Informed Indexing #261: Unlike Long-Term Returns, Short-Term Return Sequences Are Highly UnpredictableValuation-Informed Indexing #255: How Developments Like the Greek Debt Crisis Affect Stock PricesValuation-Informed Indexing #260 : Shiller’s Ideas Should Be Treated as Mainstream Ideas“We Don’t Accept the Phony Numbers. We Fear the Emotional Pain We Experience When Our Longstanding Game of Let’s Pretend Is Exposed to Daylight. We Are ASHAMED.”Valuation-Informed Indexing #268: Chase Utley’s “Dirty” Slide and Robert Shiller’s “Dirty” Research

    (4 Comments)

  • “I Was a Buy-and-Holder at One Time Because It Was Promoted as Science and That Is What I Was Looking For. That Post Ain’t Science. Buy-and-Hold Is Not Today What It Was When It Started Out.”

    Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Here is the link to what you call a death threat: https://boards.fool.com/sydsydsyd-theyre-taking-them-down-as-fast-as-we-18207722.aspx?sort=postdate It is a post talking about personal protection and ends with tips on gun safety. It is not a death threat, nor are you even mentioned or part of the conversation. It is time for you to apologize for spreading false information. I was a Buy-and-Holder at one time because it was promoted as science and that is what I was looking for. That post ain’t science, Anonymous. Buy-and-Hold is not today what it was when it started out. My sincere take. My best and warmest wishes to you and yours. Rob Related PostsBuy-and-Hold Goon to Rob: “You Appear to Make the Claim That This is a Threat Against You. Yet, When We Open the Link and Read the Post as Well as Responding Posts, We See That This Is an Ongoing Discussion of Firearms for Home Protection. There Is Even a Section at the End of the First Post Reminding People of Gun Safety Rules.”Buy-and-Hold Goon to Rob: Just Because You Were Able to Browbeat Wade Into Emailing the Trinity Guys Doesn’t Mean I’ll Do Your Bidding Too. Set Up Your Own Damn Forum.”Goon Poster to Rob: “You Have Stated What You Think Are Problems. People Have Responded As to How They Disagree. People Eventually Got Angry Because of Repetitive Comments Going in Circles.”“If Greaney Included Language Describing the Retirement Risk Evaluator, No One Could Accuse Him of Deception, Could He? Greaney Would Be Shifting the Burden from Himself to the Person Reading the Study. It’s Very Different When Greaney Does Everything in His Power to Block People from Learning What the Last 34 Years of Peer-Reviewed Research Says. That’s the Sort of Thing That Will Sway a Jury to Vote to Put You Away.”“Valuations Is a Topic That Causes Us Trouble in a Way That No Other Topic Causes Us Trouble. Can We Be Friends Despite Our Differences re These Matters?”“I Can Report That Greaney’s Retirement Study Caused a Good Number of People at the Retire Early Board to Go With Lower Withdrawal Rates Than They Would Have Gone With Had Greaney Not Posted and Promoted His Study. That’s a Positive. I Can Honestly Say That That’s the Case. So I Have […]

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  • Valuation-Informed Indexing #537: Believing in Shiller’s Research Is a Money Loser

    I’ve posted entry #537 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Believing in Shiller’s Research Is a Money Loser. Juicy Excerpt: What would happen if Shiller were to give a speech so powerful as to persuade all of the investors of the world of his case. U.S. stock prices would fall overnight by 50 percent. That would certainly be a show of the power of his ideas. But would it be a good thing? The millions of people who saw their retirement plans fail probably would not think so. The owners of the hundreds of thousands of businesses that went under probably wouldn’t think so. The millions of workers who would be thrown out of their jobs probably wouldn’t think so. The policymakers who would be left with the task of picking up the pieces of a broken country probably wouldn’t think so. This Shiller fellow did something very important. But did he do something good? Related PostsValuation-Informed Indexing #259: Return Predictions Are Implicit in All Investing AdviceValuation-Informed Indexing #262: The Unpredictability of Short-Term Return Sequences Masks the Predictability of Long-Term ReturnsValuation-Informed Indexing #270: A Critic of Valuation-Informed Indexing Offers a Concise Case for Why Buy-and-Hold Is SuperiorValuation-Informed Indexing #252: Our Beliefs About How the Stock Market Works Will Change Following the Next CrashValuation-Informed Indexing #260 : Shiller’s Ideas Should Be Treated as Mainstream IdeasValuation-Informed Indexing #267: Take Valuations Seriously and You Will Discover Things That You Were Not Initially Even Seeking to Discover

    (6 Comments)

  • Buy-and-Hold Goon to Rob: “Nothing You Say Is accurate or Factually Based. It Is Just Your Opinion. End of Story.”

    Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Nothing you say is accurate or factually based.  It is just your opinion.  End of story. Okay, Anonymous. I do wish you all good things, in any event. Rob Related PostsBuy-and-Hold Goon to Rob: Just Because You Were Able to Browbeat Wade Into Emailing the Trinity Guys Doesn’t Mean I’ll Do Your Bidding Too. Set Up Your Own Damn Forum.”Buy-and-Hold Goon to Rob: “People Believe in All Sorts of Crazy Things”Buy-and-Hold Goon to Rob: “What Is YOUR Definition of ‘Honest Posting’?”Buy-and-Holder to Rob: “I Think You Have Rationalized MANY Things in the Last Two Decades.”Buy-and-Hold Goon to Rob: “You Are a Quintessential Don Quixote.” Rob’s Response: “This Nation Is a Don Quixote Nation. People Tell Us Good Things That We Are Trying to Do Are Impossible and we Go Ahead and Do Them Anyway.”“If Greaney Included Language Describing the Retirement Risk Evaluator, No One Could Accuse Him of Deception, Could He? Greaney Would Be Shifting the Burden from Himself to the Person Reading the Study. It’s Very Different When Greaney Does Everything in His Power to Block People from Learning What the Last 34 Years of Peer-Reviewed Research Says. That’s the Sort of Thing That Will Sway a Jury to Vote to Put You Away.”

    (No Comments)

  • “Bubbles Cannot Be Contained in a Single Market. Once Pretend Money Is Created, the Bubble in the Market in which It Is Created Spreads to Other Markets. In time, It Destroys Our Entire Economic System.”

    Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Not according to Shiller.  He often speaks of a housing bubble.  You better get that van ready. Housing prices can go into a bubble. But usually it is going to be a stock bubble that is the driver of the housing bubble. There is no ban on honest posting re housing prices that I am aware of. So you have to ask yourself, what would cause a housing bubble? Why wouldn’t the tension between buyers and sellers just produce the proper price (which is the entire point of a market)? So long as honest discussion of the stock market is prohibited, a stock bubble will be created that will bring into existence trillions of dollars of Pretend Money. People think of the Pretend Money as real. That’s why the exuberance is irrational. Don’t you think that that is going to affect their thinking process re housing? If a person has enough money to afford a $300,000 house counting his stock holdings, he may feel fine offering to pay $250,000 for a house that he likes. He can afford it! But if half of the $300,000 is Pretend Money manufactured through a belief in Buy-and-Hold, he really cannot afford that house at all and will not offer to buy it. Bubbles cannot be contained in a single market. Once Pretend Money is created, the bubble in the market in which it is created spreads to other markets. In time, it destroys our entire economic system. We all need to know how much money we have. And that becomes impossible once Buy-and-Hold stock buying strategies become popular and honest posting re the peer-reviewed research is prohibited. We should be practicing price discipline in ALL markets. I do not know of any market in which the exercise of price discipline is discouraged except for the stock market. So the stock market is the driver of bubbles. We have to gain the ability to talk honestly about how stock investing works if we want all of our markets and indeed our economic system as a whole to work effectively. My best and warmest wishes to you. Rob     Related Posts“The Losses That We Need to Cover as a Result of the Continued Promotion of Buy-and-Hold ‘Strategies’ are $24 Trillion, […]

    (6 Comments)

  • “When Is the Last Time You Heard Someone Rooting for Stock Prices to Drop? It Doesn’t Happen. Sellers Root for High Prices and Buyers Root for High Prices. There Is No Tension Between the Two Sides. So There Is No Way for the Market to Arrive at the Right Price. The Stock Market Is Dysfunctional.”

    Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: I think the prices of  homes in Purceville are pretend values.  You are living in a cotton candy house.  As such, you will soon be living in a van down by the river.  Since I said it, it must be true. In the housing market, sellers make the case for why the price should be high and buyers make the case for why the price should be low. For a transaction to be completed, there has to be a meeting of minds somewhere in the middle. So both the buyer and seller have an incentive to hear out the other guy. So the market is able to function. It doesn’t work that way in the stock market. Not today. Many people put aside a portion of each paycheck for the purchase of stocks. Those people are buyers and will be for many years to come. They should be rooting for price drops. If prices dropped, they could buy more stocks for the same amount of money and retire much sooner. But when is the last time you heard someone rooting for stock prices to drop? It doesn’t happen. Sellers root for high prices and buyers root for high prices. There is no tension between the two sides. So there is no way for the market to arrive at the right price. The stock market is dysfunctional. Now, the stock market gets the price right EVENTUALLY. It has to do that. That’s the core job of any market — to get the price right. But, once large numbers of investors come to follow a Buy-and-Hold strategy, it becomes impossible for the market to perform its core job. Prices go up and they do not come down for a long time. Until eventually the market just crashes them. That’s how the market overcomes the irrational unwillingness of investors to engage in market timing. It crashes prices. And we all suffer. If we permitted honest posting, the stock market could function like other markets. Investors could become informed of the downside of buying stocks when they are insanely overpriced. So they would go to a lower stock allocation when prices got out of control. That would bring prices down to a reasonable level. You would still have steady gains […]

    (8 Comments)

What’s Here

  • Bennett/Pfau Research (60)
  • Beyond Buy-and-Hold (116)
  • Bill Bengen & VII (7)
  • Bill Bernstein & VII (2)
  • Bill Schultheis & VII (2)
  • Brett Arends and VII (1)
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  • Economics — New and Improved! (75)
  • Financial Highway Column (11)
  • From Buy/Hold to VII (283)
  • Guest Blog Entries (96)
  • Index Universe & VII (11)
  • Intimidation of VII Advocates (66)
  • Investing Basics (285)
  • Investing Experts (64)
  • Investing Strategy (34)
  • investing theory (13)
  • Investing: The New Rules (120)
  • Investor Psychology (74)
  • J.D. Roth & VII (17)
  • Joe Taxpayer & VII (14)
  • John Bogle & VII (93)
  • Larry Evans and VII (12)
  • Lindauer/Greaney Goons (284)
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  • Podcasts (200)
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  • Reality Checker (4)
  • Return Predictor (11)
  • Risk Evaluator (11)
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  • Rob E-Mails Seeking Help (67)
  • Rob's E-Mails to Researchers (1)
  • Robert Shiller & VII (75)
  • Roger Wohlner and VII (5)
  • Saving Strategies (23)
  • Scenario Surfer (3)
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Rob on the Internet

  • Rob's Weekly Valuation-Informed Indexing Column at the Value Walk Site.

  • Rob's Weekly Beyond Buy-and-Hold Column at the Out of Your Rut Site

  • Rob's Articles at the Financial Highway Site

  • Rob's Articles at the Balance Junkie Site

  • Rob's Daily Caller Articles: (1) Can We Handle the Truth About Stock Investing?; (2) How We Invest Is a Political Question; (3) The Economic Crisis Is Trying to Tell Us Something (and We're Not Listening); (4) Facts Don't Matter; (5) Going Google Stupid; (6) How Much Transparency Can We Handle?; (7) Confessions of an Internet Troll; (8) Conservatives Fall Into a Trap by Blaming Obama for the Bad Economy; (9) Meet the New Media, Same as the Old Media; and (10) How Restoring Honor Will End the Economic Crisis

  • Humble Money Experts Are the Best Money Experts, (Rob's Article in the Integrative Advisor, the Journal of the Association for Integrative Financial and Life Planning)

  • Articles on the Return Predictor, the RIsk Evaluator, the Scenario Surfer and the Strategy Tester

  • The Myth of Buy-and-Hold and Seven Other Guest Blog Entries

  • The Good Side of Stocks' Lost Decade and Seven Other Guest Blog Entries

  • A Better and Safer Way to Invest in Stocks and Seven Other Guest Blog Entries

  • The Economic Crisis Is the Best Thing That Ever Happened to Us and Seven Other Guest Blog Entries

  • The Bankers Did Not Do This to Us! and Seven Other Guest Blog Entries

  • Stock Volatility Kills! and Seven Other Guest Blog Entries

  • The Risks of Buy-and-Hold and Seven Other Guest Blog Entries

  • The Future of Investing and Seven Other Guest Blog Entries

  • What the Stock Investing Experts Don't Want You to Know and Seven Other Guest Blog Entries

  • What's the Best Age at Which to Experience a Stock Crash? and Seven Other Guest Blog Entries

  • Guest Blog Entry Compares Our Effort to Open the Internet to Honest Posting on Stock Investing with the Civil Rights Struggle of the Early 1960s

  • Our Monster Thread (153 Comments!) on Whether Bill Bengen Should Correct His Retirement Study Now That He Acknowledges the Errors He Made In It

  • Google Search Results for the Term "Valuation-Informed Indexing"
  • Favorite RobCasts

    • Bogle and Valuations

    • When Stock Losses Are True Losses and When They Are Not

    • There Is No Free Lunch! Or Is There?

    • Risk Tolerance in the Real World

    • Cash Is a Strategic Asset Class

    • Nine Valuation-Informed-Indexing Portfolio Allocation Strategies

    • Why the Stock Market Does Not Set Prices Properly (Even Though Other Markets Do)

    • Only Valuations Matter -- Everything Else Is Priced In

    • Low Stock Prices Are Better Than High Stock Prices

    • 30 Investment Myths in 60 Minutes

    Links That Matter

    • Ten Bogus Investing Truths

    • Study by Associate Professor Wade Pfau Showing That Long-Term Timing Provides Higher Returns at Reduced Risk

    • Study by Associate Professor Wade Pfau Showing That Valuation-Informed Indexing Beat Buy-and-Hold in 102 of 110 Rolling 30-Year Time-Periods in the Historical Record

    • Wall Street Journal Article Pointing Out That the Idea That Long-Term Market Timing Does Not Work Is a "Myth" of Stock Investing "That Will Not Die" Because "This Hoary Old Chestnut Keeps Clients Fully Invested" Even When It Is Contrary to Their Best Interests

    • Wall Street Journal Article Pointing Out That" "This Ratio (P/E10) Has Been a Powerful Predictor of Long-Term Returns" and That "Valuation Is By Far the Most Important Issue for Investors"

    • The Internet Blowhard's Favorite Phrase: Why Do People Love to Say That Correlation Does Not Imply Causation?

    • Michael Kitces (One of the Bravest of the Good Guys in This Field) Asks: "Who's Really at Risk When Avoiding Overvalued Stocks?"

    • Financial Mentor Article Reporting on How Our Knowledge of How to Calculate Safe Withdrawal Rates Has Grown During the First Nine Years of The Great Safe Withdrawal Rate Debate

    • Does the Trend Matter?

    • Improving RIsk-Adjusted Returns Using Market-Valuation-Based Tactical Asset Allocation Strategies

    • A Value Restoration Project Blog Post That Sums Up in Three Paragraphs All You Need to Know to Become a Highly Effective Investor

    • Year 20 Annualized, Real, Total Return v. P/E10

    • Year 10 Annualized, Real, Total Return v. P/E10

    • Valuation-Informed Indexing Always Superior to Buy-and-Hold Over 10-Year Periods

    • The Valuation-Informed Indexing Advantage

    • What P/E10 Predicted vs. What Actually Happened

    • Normal and Valuation-Adjusted Wealth Accumulation

    • Valuation-Informed Indexers Can Retire Five Years Sooner

    • Following Valuation-Informed Indexing Strategies Reduces Stock Investing Risk by 80 Percent

    • S&P 500 Tracked by P/E10 Level

    • Treasury Inflation-Protected Income Securities (TIPS) Table

    • Best, Average and Worst Returns Since 1871

    • Compound Annual Growth Rate Calculator

    • Investing Through Time

    • Mapping S&P 500 Performance

    • S&P 500 at Your Fingertips

    • S&P 500 Return Calculator

    • Russell's Research

    • Shiller's Data

    • Safe Withdrawal Rate Research Group