A Rich Life

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

“My “Fantasy” Is That Someday the Same Laws That Apply in Every Field Other Than the Investment Advice Field Will Apply in the Investment Advice Field as Well.”

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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:

My money is a lot more real vs your money. I actually have it in my accounts. Your money is part of some fantasy that you are someday going to get a wild windfall.

No, Rob. We are not on your side. Fix your own problems.

My “fantasy” is that someday the same laws that apply in every field other than the investment advice field will apply in the investment advice field as well. I view that as an entirely realistic belief. I believe that the arc of history in the personal finance realm bends toward rationality.

Rob

 

Comments

  2. I don’t know the answer.

    I know that I would not feel good about myself if I said that I believe that the Greaney retirement study contains a valuation adjustment. So I don’t do that.

    I believe that we are fundamentally a good people. And I believe that we have made enormous progress if our effort to discover the realities of stock investing. 44 years ago, we did not have Shiller’s amazing research findings. 25 years ago we did not have Shiller’s best-selling book. 12 years ago Shiller had not been awarded a Nobel prize. We are closer than ever. That’s all that I can say about it.

    Rob

  3. To have a secure retirement, you would need to know the answer to that. Otherwise, you would have to stick to what has always worked (which is buy and hold).

  4. In a world in which valuations affect long-term returns, it is a logical impossibility that a strategy that discourages valuation-based market timing could ever produce good results in the long run.

    The U.S. economy has performed well for a long time. So the stock market has performed well for a long time. But an investor will always hurt himself by refusing to practice price discipline. Valuation-based market timing always adds, it can never subtract. Practicing price discipline is Staying the Course in a meaningful way.

    There’s a reason why those who promote Buy-and-Hold don’t want to see the last 44 years of peer-reviewed research discussed on the internet.

    Rob