“Buy-and-Hold Fails Every Time There Is a Change in Valuations and There Is an Investor Who Fails to Change His Stock Allocation”

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

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.

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