Ghost of Igloi wrote:
I noticed you selected pieces of my post to create your own narrative. As I explained I have no particular quarrel with "buy and hold" strategy. Of course one can point to the superiority of the strategy when index funds have done very well while markets are at an all-time high. A Google search reveals criticism of the strategy at the market bottoms of 2000 and 2007. The ten year S&P 500 return 12/31/1999 (1,469.25) through 12/31/2009 (1,115.10) was -24.1%. An individual that retired 1/1/2000 with a 60/40 stock/bond would clearly make a mistake holding such a portfolio. So it is rubbish to believe that other factors such as valuation, risk tolerance and time horizon should not be part of the investment process. Buy and hold is neat and simple, and does make theoretical sense, but in practice may be less than optimal.
A person who retired at the end of 1999 with $1,000,000 in VBINX and withdrew $4,000 a month ( $48,000 a year ) would now have $890,102.