I’ve posted Entry #564 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called We Are All Responsible for the Popularity of Buy-and-Hold.
Juicy Excerpt: I recall one year looking at the numbers for our stock portfolio in preparation for the budget-crafting task and being delighted at how much the stock gains for the year had made it so much easier to achieve my goals. Spending cuts? Who needs spending cuts when you can create imaginary money with bull market gains and thereby get to the same place? I obviously didn’t see it that way at the time. But I try to bring that moment to mind when I am struggling to understand how Buy-and-Hold became so popular despite the obvious danger of going with an approach that disdains market timing/price discipline. I made Buy-and-Hold popular! At least at that moment in time I did! Because I experienced the same Get Rich Quick impulse that everyone else experiences. And so I felt that same warm feeling when hearing about bull market gains that everyone else feels.
People support buy and hold as well as the 4% because it works, even in tough markets.
https://www.bogleheads.org/forum/viewtopic.php?f=10&t=237334
Show us when it hasn’t worked.
Even Evidence-Based Investing acknowledged in a comment posted her a few weeks ago that the studies that report a 4 percent withdrawal as safe do not contain valuation adjustments, Anonymous. When you’ve lost Evidence….
Rob
Everyone acknowledges that the studies that report a 4 percent withdrawal as safe do not contain valuation adjustments.
That’s super, Evidence.
The last time you said that, I asked you if you would be willing to specify the date on which you first called on John Greaney to correct the error in the retirement study posted at his web site, You indicated that you had never done that. So you acknowledge that the study is in error but you do not feel any sense of urgency about getting it corrected?
Do you understand that there are people who looked to the Greaney study for guidance on how to construct their retirement plans?
Rob
He did not say that the study was in error. There you go making things up again.
He said that it lacked a valuation adjustment. If a valuation adjustment is required and the study does not include one, the study is in error. Are you saying that you don’t think a valuation adjustment is required?
Rob