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 said the last 14 years did not work out like you thought it would. That is not much comfort to anyone that might have followed your advice and is now entering retirement.
It is certainly so that the last 14 years did not work out as i thought they would. If someone said that they were not going to follow the Valuation-Informed Indexing strategy as a result, I would not find fault with them. I don’t think that would be a crazy position to adopt.
It’s up to the individual. Each person has to decide for himself or herself what strategy to follow.
Rob
You wouldn’t find fault with them? Really? Instead, you would just call them a goon and then make up death threat allegations against them.
Not even remotely true. I love Buy-and-Holders. John Bogle is my second favorite investment analyst of all time (Shiller holds first place). Bogle was known as the king of Buy-and-Hold. I was once a Buy-and-Holder myself. So I obviously have great respect for the strategy, I incorporated every element of the Buy-and-Hold strategy (except for the idea that market timing is not required — which was discredited by Shiller’s Nobel-prize-winning research) into the Valuation-Informed Indexing strategy. My first name for the strategy rooted in Shiller’s research was Buy-and-Hold 2.0.
I had to give up on that idea because it seemed silly to be saying that I am a Buy-and-Holder while Buy-and-Holders were threatening to kill my loved ones, So I don’t call myself a Buy-and-Holder today. All that Valuation-Informed Indexing is is Buy-and-Hold updated to accept the past 40 years of peer-reviewed research. And Buy-and-Hold started out as a research-based strategy, So I am more the Buy-and-Holder than today’s Buy-and-Holder. If you say that market timing is not required, you are rejecting the key principle of Buy-and-Hold (that research provides useful guidance).
The Buy-and-Holders lost their way when they became defensive over Shiller’s amazing research findings. Following research and using death threats to silence discussion of research are very different things. The Buy-and-Hold of today is a very different thing from the Buy-and-Hold of the strategy’s early days. It is the OPPOSITE. Death threats and extortion are rooted in emotion, peer-reviewed research is rooted in human reason.
My sincere take.
Rob