“Shiller’s Research Wasn’t Available When Buy-and-Hold Was Being Developed in the 1960s.”

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

It is just one big conspiracy.  The world plotted to make you broke, divorced and a cast out.

Is ignorance of the realities of the world a conspiracy? Was it a conspiracy when we didn’t know that smoking causes cancer and we failed to warn people of its dangers? Was it a conspiracy when doctors used to bleed patients and were actually hurting them rather than helping them? Was it a conspiracy when we didn’t appreciate the risks of using pesticides and overused them.

Shiller’s research wasn’t available when Buy-and-Hold was being developed in the 1960s. So the people who developed it had to take a wild shot in the dark on the question of market timing. It shouldn’t be too surprising that they got it wrong. Fortunately, we learned the realities in 1981, when Shiller published his Nobel-prize-winning research. Unfortunately, a lot of the people who were promoting Buy-and-Hold felt funny about acknowledging that they were every bit as capable of making a mistake as all the other humans.

So here we are. We now know the realities. We all can begin living better and richer and fuller and freer lives than we ever imagined possible in the Buy-and-Hold Era. The price of admission to this amazing new world is learning how to pronounce the words “I” and “Was’ and “Wrong.” I say that we should go for it. I am not able to imagine any possible downside.

My best wishes to you.

Rob