Buffet’s bet was spot on — unless you’re Warren Buffet, or you’re an investor in Japan in the late 1980s, or in most European markets in the 1930s…

In reality, markets do crash and they don’t always recover quickly. It’s good to keep in mind that Obama saved the stock market against the will of most Republican congressmen.

Buy-and-hope worked wonderfully during the past decade. In the future, if you are interested in good risk-adjusted returns, you’ll need to be more active.

That doesn’t mean being emotional, or hyperactive. For example, a very simple strategy of investing your money in medium-term bonds (IEF), but putting 50% of your money in the S&P 500 (SPY) whenever it is above its 200-day moving average, returned 8.42% since 2004, with a maximum monthly drawdown of only -6.42%. The SPY during the same time returned slightly more (9.02%), but in its worst month recorded a horrendous drawdown of -50.8%.