“We Now Know What Works and We Should All Be Enjoying the Benefits of Finally Knowing What Works. But There Were Years When We Didn’t Know What Works and We Built an Entire Industry Telling the Story As We Understood It Then and It Is Terrifying to Think of Tearing Down that Industry and Starting Over.”

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.” – Upton Sinclair

That’s the story of the investment advice field over the past 39 years, Evidence. We now know what works and we should all be enjoying the benefits of finally knowing what works. But there were years when we didn’t know what works and we built an entire industry telling the story as we understood it then and it is terrifying to think of tearing down that industry and starting over.

I believe that eventually we are going to see that we have no choice but to start over. If only Shiller had published his research before Buy-and-Hold came along, I don’t think that there would be a single dissenter to Valuation-Informed Indexing today. It’s not what we don’t know that is killing us. It’s what we once thought we knew for certain that turned out to just not be so.

Rob