Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Every buy and holder? Can you give us @ link to just one failed portfolio? At the same time, can you show even one successful person that has implemented VII?
Take a look at all of the stock portfolios that existed in 1929. They all fell by a huge amount. The collective losses were large enough to bring on a Great Depression, That should never happen.
Once we have a widespread understanding of the importance of market timing, it will never happen again. All investors went to act in their self-interest. Show them how much the value proposition of stocks drops when prices reach insanely dangerous levels and they will lower their stock allocation at such times. Which will bring prices back to reasonable levels.
There can never be an out-of-control bull market in a world in which honest posting re Shiller’s Nobel-price-winning research is permitted. Which means that there can never be a bear market. Which means that there would in all likelihood never be an economic crisis. I can live with that.
ALL Get Rich Quick/Buy-and-Hold portfolios are failures. Because failing to engage in market timing dramatically reduces long-term returns while dramatically increasing risk. Successful strategies do just the opposite. We should be permitting honest posting re the last 40 years of peer-reviewed research at every site.
My best wishes to you.
Rob
The market has recovered from every drop. Market timing has never worked and even failed to work for you. Thanks for making a case for buy and hold.
Long-term market timing has worked every single time it has been tried. The Bennett/Pfau peer-reviewed research shows that beyond any doubt whatsoever. It’s impossible for the rational human mind to imagine a circumstance in which exercising price discipline (which is what long-term market timing is) would not work.
To say that the market eventually recovers after suffering a Buy-and-Hold Crisis is like saying that an area hit by a hurricane can eventually be rebuilt. That’s not a reason not to warn people to evacuate an area in which a hurricane is about to hit.
Rob
“Long-term market timing has worked every single time it has been tried. The Bennett/Pfau peer-reviewed research shows that beyond any doubt whatsoever.”
As the science fiction author, Larry Niven, said “Any damn fool can predict the past.”
That’s fair.
I cannot say for certain that stocks are going to continue to perform in the future somewhat as they always have in the past. Maybe they will. Maybe they will not.
But I sure don’t think it would hurt people to know about how they have always performed in the past. It’s an important point of information for all investors. And about 10 percent of all the board communities has expressed a desire to be able to hear what the last 40 years of peer-reviewed research says. I think they should be able to do so.
There’s certainly a chance that Get Rich Quick/Buy-and-Hold will fail yet one more time. When that happens, how will things go for those who engaged in criminal behavior to block people from hearing what the last 40 years of peer-reviewed research teaches us? My guess is: “Not so good.” Whereas, if U.S. laws and had been followed and people had been able to hear both sides of the story, people would just conclude that the Buy-and-Holders had given it their best shot and happened to get it wrong, no biggie.
It is my sincerely and strongly held view that permitting honest posting re the last 40 years of peer-reviewed research is best for everyone, Valuation-Informed Indexers and Buy-and-Holders alike. Call me madcap.
My best and warmest wishes to you and yours, Evidence.
Rob