A Rich Life

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

Comments

  1. I’m still only 40 and am still a millionaire. You’re pushing 70 and have never been a millionaire. In this game that “score” matters a lot.

  2. Your opinion is not the same as the actual research. One study does not constitute the last 43 years of research. Outcomes are what matter. Outcomes tell us who is right and who is wrong.

  3. What is described by as success by the person you reference in this post is that he/she has millions in retirement accounts/savings that can be spent on retirement needs. What you call success is your opinion on what one guy said. He much can the person with millions spend on retirement needs versus what you can spend with what you have. I think most of us value the ability to have money in our retirement vs trying to determine if your opinion is to be considered. Outcomes matter.

  4. I’m still only 40 and am still a millionaire. You’re pushing 70 and have never been a millionaire. In this game that “score” matters a lot.

    I don’t think so, Sensible. I see the this-moment-in-time score as an illusion. The score that mattets is the over-the-course-of-a-lifetime score. Valuation-Informed Indexing always prevails over the course of a lifetime.

    I have done hundreds of runs with the Investor’s Scenario Surfer. The calculator permits you to compare how the Buy-and-Hold investor is doing with how the Valuation-Informed Indexer is doing at the end of each year. Over and over again, you find yourself thinking after five years or ten years or fifteen years, “Well, the Buy-and-Holder is just too far ahead this time, the research-based strategy is going to produce a worse outcome this time.” And then it flips. You experience the Buy-and-Hold Crisis and the Valuation-Informed Indexer goes ahead and then he stays ahead until the end.

    That’s how stock investing works. The aim of the game is to avoid the illusion produced by irrational exuberance. If you can avoid that illusion, you see a huge payoff. But you need to be able to tune out all the noise being generated by our Wall Street Con Man friends during the times when Buy-and-Hold is popular and irrational exuberance is out of control. That’s pretty much the only difficult aspect of stock investing. People are going to tell you that valuation-based market timing is not 100 percent required and you need to tune that out no matter what the numbers appear to say at that moment in time.

    This is what sound investment advice is. The aim of the game is to help investors tune out the Buy-and-Hold illusions. That’s what it’s all about.

    Or so this Rob Bennett fellow sincerely believes, in any event, you know?

    My best wishes.

    Rob

  5. Your opinion is not the same as the actual research. One study does not constitute the last 43 years of research. Outcomes are what matter. Outcomes tell us who is right and who is wrong.

    Shiller’s Nobel-prize-winning research paper showing that valuations affect long-term returns is only one research paper. But it remains the controlling authority on the questions addressed by it until it is discredited. That has never happened in any way, shape or form in 43 years.

    I’ve been doing this for 22 years now and there has never been a Buy-and-Holder who made a case that Shiller’s research doesn’t stand up to scrutiny. All of the efforts have been directed at getting people to stop talking about it The feeling among Buy-and-Holders is, if no one talks about Shiller’s amazing research findings, it’s just as if those research findings don’t exist. They exist. And smart people who would very, very much like to be able to discredit them have not been able to do it. The fact that the Buy-and-Holders are so impressed by Shiller’s research that they don’t even try to discredit it gives that research persuasive power.

    My sincere take.

    Rob

  6. What is described by as success by the person you reference in this post is that he/she has millions in retirement accounts/savings that can be spent on retirement needs. What you call success is your opinion on what one guy said. He much can the person with millions spend on retirement needs versus what you can spend with what you have. I think most of us value the ability to have money in our retirement vs trying to determine if your opinion is to be considered. Outcomes matter.

    Lifetime outcomes matter. Not moment-in-time outcomes. If you believed that Buy-and-Hold had even a one-in-time chance of prevailing in an environment in which honest posting re the peer-reviewed research was permitted, we never would have seen a single abusive post, much less any of the criminal stuff.

    Ignoring 43 years of peer-reviewed research is an emotional choice.

    My sincere take.

    Rob

  7. Over the last 30 years, you have never been ahead of the buy and holders. That is long term outcomes and not a moment in time outcome. You are now at a point where it is too late.

  8. Stock prices have remained crazy high for a longer stretch of time in recent years than at any earlier stretch of time in U.S. history. The question is, what are we to do about that reality? One approach is to say: “Everything about how stock investing works has been flipped on its head, it’s now a good idea to defy both common sense and the peer-reviewed research and follow a pure Buy-and-Hold strategy.” The other is to say: “In the event that stocks continue to perform in the future anything at all as they always have in the past, this is going to end in tears, we all should be doing everything in our power to get every internet site opened to honest posting re the peer-reviewed research.”

    I am strongly in the latter camp, Anonymous. Sue me.

    Rob