Nice article Pop. About the whole buy and hold, it has been shown that with a low cost ETF or Index fund that it is about the best you can do. If you go and read about CA and VA (Cost and Value averaging) then you will see that these are the two best ways to invest and inherently are mildly contrarian.
CA allows yo to both over and undershoot whereas VA ensures a final sum – if you can muster the required investments.

Personally I didn’t invest much during the boom as I wrote a program to value the markets independently of my own lack of ability to keep focus – I have however done very well in the last 16 months. I never discuss the actual figures of my investments and my only outstanding regret is not having enough money when my program said “Buy you fool, why aren’t you buying?”

This allows me to remove my emotions from the equation and has worked well for me so far. I wish you all well and hope you find your own way to success.
Personal hint: The markets are too powerful to control but they are not of themselves clever. As long as our population remains industrious there will be money to be made on the markets.

I think the key is to have all of the “experts” encouraging us to increase or lower our stock allocations in response to price changes. Lots of investors don’t follow investing that closely and tend to do what the big names suggest. We need a lot more encouragement to engage in long-term timing, in my view.

Rob

Thanks for the comment. Sometimes I’m skeptical as to whether most investors can properly assess whether valuations are high or low. And even if they could assess it, I’m not sure how many of us can consistently muster the chutzpah to be a contrarian when the market’s doing well. If you went that route, I guess the ideal situation would be to have a strategy that you could implement automatically, without even thinking. (Maybe fundamental indexing? I don’t know…)

I’ll definitely check the calculators out.

- Pop

I agree with the main point being made in this blog entry, Pop. But I think you take the idea too far. You are essentially endorsing Buy-and-Hold, which means that you stick with the same stock allocation even when stocks are selling at insanely dangerous prices. I think that’s a case where you really do need to be willing to do something (lower your stock allocation) to protect your portfolio.

You mentioned endorsing calculators in your “About” section. I would be grateful if you would take a look at mine. It’s called The Stock-Return Predictor. It performs a regression analysis of the historical stock-return data to reveal the most likely 10-year return starting from any of the possible valuation levels. If you go to the home page of my blog, you’ll see a button marked “Return Predictor” on the left-hand side of the page in the event that you want to check it out.

Thanks.

Rob