Bogle’s legacy: Returns that trounce active investing – MarketWatch 08-07-14

Salient to Investors:

Mitch Tuchman at Rebalance IRA writes:

  • The best strategy for a retirement investor with a 5 to 25 year time horizon in a tax-deferred account uses low-cost index funds allocated across multiple asset classes and re-balanced at least annually.
  • Re-balancing – the discipline to sell assets that have gained to reinvest in assets that have declined – brings is a huge advantage.
  • Burton Malkiel at Princeton says re-balancing a stock/bond split portfolio annually added 1.5% to returns during the past 15 years.
  • Diversify over multiple asset classes, including large-caps, small-caps, developed-foreign and emerging-market stocks, bonds and real estate.
  • John Bogle at Vanguard says over a lifetime of active investing, the active manager gets 80% and the investor gets 20%.

Read the full article at http://www.marketwatch.com/story/bogles-legacy-returns-that-trounce-active-investing-2014-08-07

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