As others have said, I think the term 'market timer' is a misnomer for Bob. During his ENTIRE radio career from 1982, he has been bullish. He was bullish before and after the 1987 crash. And of course, he has been right. Buy and hold works fine if you buy quality companies (like those in the S&P500) and are willing to wait long enough.
Since his model has not turned bearish for approximately 20 years, I wonder if it ever will? I follow him, but I could envision a scenario where the market tanks and he misses that, and then stays bullish throughout any move down.
Turning off the radio and cancelling all your subscriptions and just buying the S&P500 and holding it forever works fine if you are waiting mega years. Louis Rukeyser figured this out long ago. He has been on TV for over 20 years advocating buy and hold, and over long periods of time it has worked well and the public sees him as a sage, a voice of stability among the reactionaries. He is. All he has to do is just stay bullish forever and eventually (even if after his demise) he will absolutely be proved right. Compound inflation should take care of that, no matter what the short term moves in the market.
Oh, by the way. One thing I have never heard mentioned is that Brinker's newsletter (for which he charges $190/year) has 3 model portfolios called I (aggressive), II(less aggressive, more income), and III (mostly income, for retirees). People follow these religiously, allocating their money among around a dozen actively managed funds per portfolio. He publishes the total return figures for those portfolios from their beginning around 10 years ago. THEY HAVE UNDERPERFORMED THE S&P500 OVER THAT TIME! So, why buy the newsletter, listen to the show, and buy so many different funds in different accounts, changing funds over time as they move in/out of favor? You could have done slightly better by being totally passive and tuning out the world. And you would have saved a lot of effort and time and probably saved some taxes along the way too.
Maybe people just get some satisfaction from the illusion that they are "active" investors. They like to move their money around from place to place. It is a hobby and gives them something to talk about at social gatherings and makes for hot conversation on the web! |
