A Rich Life

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

“When an Idea is Discredited by New Research, That Doesn’t Mean That the People Who Came Up With the Discredited Idea Were Dumb. It Means That the Humans Did Not Come to Planet Earth With a Manual Telling Them How Everything Works.”

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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:

We are so lucky that you can tell us what research counts and how to interpret it since we are a bunch of stupid morons.  It has all worked out so well for you, that I am sure everyone wishes they were in your spot right now.

When an idea is discredited by new research, that doesn’t mean that the people who came up with the discredited idea were dumb. It means that the humans did not come to Planet Earth with a manual telling them how everything works. We learn more over time.

That’s the purpose of research, to learn new things. That’s what makes it do great.

Rob

Comments

  1. When two sports teams compete, one side wins and the other side loses. The losing team accepts the fact that they were wrong (did not do the right things to win the game). The losing team doesn’t blame the winning team for their own failures. Get the picture?

    You are broke. You are on the losing team. You made the wrong choices. The buy and hold crowd one the game with consistent retirement successes. Stop blaming those that made the successful people for making the right choices. Accept the fact that you were wrong and are broke as a result of your decisions.

  2. The Buy-and-Hold team has failed for 23 years to insist that the Greaney retirement study be corrected. The Buy-and-Hold team lost the game.

    The object of the game is not to avoid admitting that you ever got anything wrong. The object of the fame is to help the people who listen to you investment advice. Acknowledging mistakes is a key part of what it takes to win the game.

    That’s where I’m coming from re this terribly important matter, in any event.

    Rob

  3. Just because you say something, it doesn’t make it true. Buy and hold has never failed and you cannot point to one single person with a buy and hold failure. To the opposite, you can’t point to even one single successful outcome with market timing. You are broke, Rob. You lost the game. You got everything wrong. Everyone abandoned you. You fail to acknowledge your long list of mistakes.

  4. Buy-and-Hold fails every time there is a change in valuations and there is an investor who fails to change his stock allocation. I mean, come on.

    Even the Buy-and-Holders say that investors should seek to “Stay the Course.” Well, an investor who stays at the same stock allocation when the CAPE value has changed is not exactly staying the course, is he?

    The Buy-and-Holders got it right about staying the course and about following the peer-reviewed research. They got it wrong about there not being a need to practice valuation-based market timing. Price discipline is critical in all markets. We now have 44 years of peer-reviewed research showing that the stock market is not the sole exception to the common-sense rule.

    Buy-and-Hold is a marketing gimmick. It’s what sells. Valuation-Informed Indexing (Buy-and-Hold updated to reflect what we’ve learned from the last 44 years of peer-reviewed research) is what works. I would permit honest posting re the peer-reviewed research at every site and see what happens.

    Rob

  5. You are broke. You are divorced. You got everything wrong. Take responsibility and stop blaming everyone else.

  6. And I was right about the Greaney retirement study lacking a valuation adjustment.

    Rob

  7. And you were wrong thinking that it needed an adjustment……….it resulted in your going broke and your wife leaving you. Great job, Rob.