Get Rich Slowly by Malkiel

Burton Malkiel has an op-ed in the WSJ claiming that a simple buy-and-hold strategy of a few broad index funds would have beaten the market soundly this past miserable decade. His suggested portfolio is as follows: 33% in fixed income (VBMFX), 27% in US stocks (VTSMX), 14% in developed foreign markets (VDMIX), 14% emerging markets (VEIEX), and 12% in REITs (VGSIX). He says $100K would have resulted in $192K with this strategy vs. $94K invested in the US stock market. He claims that using dollar cost averaging would have improved returns substantially. The most interesting info in the column is this:

Buy and hold investors in the U.S. stock market made an average annual return of 8% during the 15 years from 1995 through 2009. But if they had missed the 30 best days in the market over that period, their return would have been negative

How can I ride these random 30 best days? How can I avoid the 30 worst days? That seems to be the key to being a gazillionaire.


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