“If Shiller’s Research Had Been Available at the Time Buy-and-Hold Was Being Developed, the Buy-and-Holders Never Would Have Suggested That Market Timing Isn’t Always Required.”

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 to clarify, you can’t buy groceries now, but you HOPE you can buy more in the future. As such, since you can’t buy groceries now, why would anyone want to follow a timing scheme like that?

I choose to have something that works now AND the future as it always has in the past.

Buy-and-Hold has never worked in the past. It has always increased risk while reducing return. That’s been so for as far back as we have records of stock prices. The Bennett/Pfau research shows this very clearly. I believe that we should be discussing that research at every site.

Common sense and the peer-reviewed research tell us that it is a logical impossibility that failing to exercise Price discipline when buying stocks could ever be a good thing and the historical record of course backs that up. If Shiller’s research had been available at the time Buy-and-Hold was being developed, the Buy-and-Holders never would have suggested that market timing isn’t always required. They made a mistake because all of the research needed to get it right was not available at the time and they haven’t corrected it for 44 years because getting something so basic so terribly wrong makes it look like they are not really experts. But further delays in correcting the mistake just make things worse.

At the very bare minimum, the Buy-and-Holders should agree to follow the law so that others can bring the mistake to the attention of investors and to help us all to minimize the negative effects of the next Buy-and-Hold crisis.

Rob