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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Hedge Funds Are Hardly a Panacea – Wall Street Journal 06-05-13

Salient to Investors:

John Bogle writes:

While the idea of market timing is simple, many hedge fund managers have tried but precious few have succeeded.

Joe Carlen, author of “The Einstein of Money”, said the Benjamin Graham Joint Account – the predecessor to Graham-Newman Corporation – lost 70% from 1929 through 1932 inclusive, versus a loss of 64% for the S&P 500 Index – dividends included in both cases.

Read the full article at http://online.wsj.com/article/SB10001424127887323469804578523612570406102.html

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Dow 14,000: What to Do Now – Forbes 02-01-13

Salient to Investors:

Mitch Tuchman at MarketRiders writes:

  • Google Trends shows people are getting interested in stocks again, and the market rally has unleashed media stories about small investors getting back into equities.
  • Stocks were never safe, nor will be.
  • The bond market implies all kinds of risks that most small investors ignore, such as credit risk, interest rate risk, and inflation risk.
  • Jack Bogle at Vanguard says stocks will double over the coming decade versus 35% for bonds.
  • True diversification includes hard assets, such as commodities, a mixture of stocks and bonds that includes foreign and emerging country shares, small-cap stocks, and real estate.
  • The key to risk-adjusted investing is to buy diversified index funds and ETFs, and own the correct mix of asset classes, with occasional rebalancing.

Read the full article at http://www.forbes.com/sites/mitchelltuchman/2013/02/01/dow-14000-what-to-do-now/

 

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Jack Bogle: Here Are The 6 Books That Every Investor Must Read – Business Insider 12-14-12

Salient to Investors:

Jack Bogle at Vanguard recommends these investing books:

  1. The Intelligent Investor by Benjamin Graham,
  2. A Random Walk Down Wall Street by Burton G. Malkiel
  3. Unconventional Success by David F. Swensen
  4. The Four Pillars of Investing by William J. Bernstein
  5. Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay
  6. The Bogleheads’ Guide to Investing by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf

Read the full article at http://www.businessinsider.com/jack-bogles-must-read-investment-books-2012-12?utm_medium=email&utm_campaign=Post%20Blast%20%28moneygame%29%3A%20FINANCIAL%20ADVISOR%20INSIGHTS%3A%20Advisors%20Are%20Rejecting%20The%20Portfolio%20Management%20Theory&utm_source=Triggermail&utm_term=tech#

Squaring the Views of Bogle, Gross and BlackRock’s Fink – Morningstar 10-23-12

Salient to Investors:

The days of instant rewards from the stock market are over.

Larry Fink at Blackrock says be 100% in equities, prefers stocks to bonds.

Bill Gross at Pimco says the cult of equities is dead but sees stocks offering double the nominal return of bonds over the next several years.

Jack Bogle at Vanguard says buy a balanced portfolio, and prefers stocks to bonds

Fink, Gross and Bogle do not expect equity returns to reach the 6.6% historical real return or bond returns to be more than the current coupon.

Read the full article at http://www.morningstar.co.uk/uk/news/96056/Squaring-the-Views-of-Bogle-Gross-and-BlackRocks-Fink.aspx