A Rich Life

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

“No, the Market Is Not Efficient, No, Investors Are Not 100 Percent Rational, No, Stock Investment Risk Is Not Stable But Is Variable, and Yes, Market Timing Is Always 100 Percent Required for Every Investor Who Wants to Keep His Risk Profile Constant Over Time.”

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

“Say that there is a one-in-a-hundred chance that the Greaney retirement study really does lack a valuation adjustment”

There is a hundred-in-a-hundred chance that the Greaney retirement study really does lack a valuation adjustment

We are 100 percent on the same page re that one, Evidence.

Now we just need to work out whether a valuation adjustment is required to calculate the safe withdrawal rate. To do that, we need to open every discussion board and blog on the internet to honest posting re the far-reaching implications of Shiller’s amazing, Nobel-prize-winning research showing that, no, the market is not efficient, no, investors are not 100 percent rational, no, stock investment risk is not stable but is variable, and yes, market timing is always 100 percent required for every investor who wants to keep his risk profile constant over time.

I naturally wish you all the best that this life has to offer a person regardless of what investment strategy you elect to follow.

Rob

Comments

  1. Do you feel that you can offer the same or superior investing advice versus people like Wade Pfau, Michael Kitces and/ or Bill Bernstein?

  2. I think that everyone alive will offer better investment advice once we have opened every discussion board and blog to honest posting re the last 41 years of peer-reviewed research in this field. My contribution is to get every site opened to honest posting. Then all of the others will be able to do much. much better work. The combined effect will be amazing.

    The entire purpose of doing peer-reviewed research is to learn things and then to tell people about what you have learned. For so long as we ban the discussion of anything that we did not know in 1980, we are all worse off than we would be if we had just permitted honest posting re the new stuff we learn, as we do in every other field.

    Say that people in the typewriter industry felt bad when people started using word processors and that they were powerful enough to get personal computers banned. We would all be worse off today. When all new knowledge is banned, you don’t even know what you are missing out on because all you have available to you is the old stuff. When you permit knowledge to advance, one thing leads to another and in not too much time you are in a place that you never could have imagined in the days when all you had was the old, now discredited, knowledge.

    I believe that the last 41 years of peer-reviewed research is the most important 41 years of peer-reviewed research in the history of investing analysis. We all should be making use of what we have learned from it on a daily basis.

    Rob