“Say That Someone Told You That His Approach to Buying a Car Was Going to Be to Go to the Nearest Dealership and Pay Whatever Price They Were Asking Without Spending One Moment Looking Into the Question of What the Car Was Worth. Would You Say That That Approach Might Work?”

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

You can’t even show one time where buy and hold failed over any 30 year period.  Whereas, market timing failed every time, just like it failed for you.  Wade Pfau pointed this out last year.

Buy-and-Hold (failing to exercise Price discipline when buying stocks) has failed every single time it has been employed. Say that someone told you that his approach-to buying a car was going to be to go to the nearest dealership and pay whatever price they were asking without spending one moment looking into the question of what the car was worth. Would you say that that approach might work?

I would say that it could not possibly work. It’s possible that he could get a quality car and it’s possible that the dealer might not rip him off too much. But no matter how things played out, he added to his risk by failing to do any research into the real value of the car before buying it. So he hurt himself by following a Buy-and-Hold “strategy.” Buy-and-Hold is not a strategy, it is a marketing gimmick. We need to move past it and permit discussion of the last 44 years of peer-reviewed research,

Rob