Tag Archives: valuation-informed indexing

The Gene Mauch Rule for Investing Success

The Gene Mauch Rule for Investing Success

Gene Mauch was the manager of the Phillies baseball team when I was a boy growing up in Philadelphia. He once said something in an interview that has stuck with me ever since. Mauch said that, when his team was on a winning streak, his job was to pop holes in the inflated egos of

What Bogle Says About Valuation-Informed Indexing

I am a critic of Buy-and-Hold and an advocate of Valuation-Informed Indexing. The one difference between the two strategies is that Buy-and-Holders say that it is not necessary to time the market while Valuation-Informed Indexers believe it is imperative to change your stock allocation in response to big valuation shifts so as to keep your

How to Use Valuation-Informed Indexing — Part Two

How to Use Valuation-Informed Indexing — Part Two

The valuation metric (P/E10 — the price of an index over the average of its last 10 years of earnings) used in The Stock-Return Predictor to identify the most likely long-term return is research-tested. It has worked well for the entire 140 years of U.S. stock-return history available to us. For example, research by Wade

How to Use Valuation-Informed Indexing — Part One

How to Use Valuation-Informed Indexing — Part One

I advocate Valuation-Informed Indexing. This investing strategy is the alternative to Buy-and-Hold. Buy-and-Hold is rooted in the research of University of Chicago Economics Professor Eugene Fama and assumes that overvaluation is a logical impossibility; thus, it posits that investors need not change their stock allocations in response to price changes. Valuation-Informed Indexing is rooted in