Benjamin Graham. In one of the last interviews he ever did he said that there was so much competition in the financial markets that index funds were the wise way to go. Financial Analysts Journal, 1976.

Doesn’t anyone realize that the Dow Jones Industrial Average, as regularly quoted in the media, does NOT include dividends? The same is true for the S&P 500 generally. If you want the total return you would need to use VFINX, Vanguard’s fund.

Dollar Cost Averaging has been debunked more times than I have fingers. NOBODY GAINS FROM DOLLAR COST AVERAGING: ANALYTICAL, NUMERICAL AND EMPIRICAL RESULTS, Financial Services Review, Volume 2, issue one, Knight and Mandell.

If you can’t discern the difference between Wall Street and mutual fund propaganda and the reality of investing best keep your money in the bank. Try reading articles by Paul Samuelson and Zvi Bodie. No stocks for the long run, no buy and hold, and only index funds Diogenes

Here is a scenario. Baby boomers take their money out of the market, but they spend more on drugs. That increases revenue for a company like Abbott. The increased revenues make it flush with cash. To raise the stock price, they increase the dividend (already almost 4%). Government keeps rates low and eventually investors will be drawn to the difference in dividend. People remember stuff but only so long.

That is just one scenario. There are plenty of ways that the market can avoid going down just because the baby boomers are taking money out. For instance, Gen X is small, Gen Y is huge.

The incentive for the government is to inflate, that wipes away debt and keeps investment going. That means prices and revenue will go up.

This may be in 2 years, it may be in 10 years. I agree, if you are trying to retire right now, you can’t plan on it. Eventually, it will probably be the best investment return. That is a risk if you want steady returns.

Most of the points you have made in this article looks like your hypothesis to me.

Do you have statistics or data to backup your statements? More data and evidence would be helpful for believers in buy and hold investing like me to see your side of the story. There is tons of information and data to backup the claims of great buy and hold investors like Ben Graham, Warren Buffett, just to name a few. So if you can provide some data for us to look at, that would be great. So we can look at why you say Buy and hold investing is only for people with herd mentality.

I greatly admire your other other articles about your early retirement philosophy though.

A retired person should not be investing 100% of their portfolio in stocks anyway. Only such portion of a retirement portfolio should be invested in stocks where the retiree would not be needing that money for at least 15 years.

> Your flat theory assumes you would have
> invested all your money in a single lumpsum.

When you retire, that is what happens. You are essentially investing as a lump sum. After all, when you are retired, where is the money for future investments going to come from?

The flip side is protecting those gains when the market starts to tumble, and that means getting out when the market is looking rich, not after it’s fallen 20-30%. I don’t see bonds as being an effective counter stocks, certainly not in the way it’s portrayed. There have been times when all asset classes have fallen at the same time. In the early 1980s for example, high interest rates caused stocks, bonds and commodities to fall at the same time.

When the market is already lower, you dont sell. That is the reason you need to have 4-5 years of living expenses in very liquid or relatively safer investments after you retire.

That is the reason you do DCA and follow the principles of asset allocation.

Your flat theory assumes you would have invested all your money in a single lumpsum.

Creating your own profits with a business is the real way to control your investments. It’s very risky because it’s self dependent, but at least it’s your money under your control. Plus i like saying I have 17.9 Million Shares of XXXX Company, and reading news articles how FreeUrChains is CEO of XXXX Company. It makes my day and goes to my head, aka gives me confidence. Forecasts are then seen for 200% growth (hopefully) at the end of Year 5, then the impact on the whole world begins after your IPO