Tag Archives: John Bogle

The 50-50 Portfolio Solution?

The New York Times had a piece this weekend that proposes a simple portfolio solution for worried investors. 

Are you ready for this? 

The portfolio is a 50% allocation to stocks and 50% to bonds.  The conclusion that the 50/50 portfolio makes sense is based on a study by Vanguard published in October 2011 that finds that this allocation seems to generate consistent returns, regardless of whether the economy is in recession or expansion.  The study is based on portfolio performance from 1926 through June 2009. 

The 50/50 portfolio generated an average annual return of 7.75% per year during recessions and 9.9% per year during expansions.  Continue reading

Jack Bogle’s Growth Outlook for Stocks and Bonds

Vanguard founder and investing icon John Bogle doesn’t believe we’re in a bond bubble, but he does think bonds will produce only modest returns for quite some time. Still he says investors generally belong in the conventional stock and bond markets — not reaching into more exotic categories for yield.

In this interview (video below) with Morningstar at the recently concluded Bogleheads reunion outside Philadelphia, he runs through a common sense approach to estimating what kind of yields investors can expect over the next five to ten years from those conventional categories. Continue reading

Mel Lindauer on Income Investing

Yesterday Mel Lindauer, Forbes columnist, book co-author, Boglehead extraordinaire, offered some advice for younger investors. Rocky markets like the one we’ve been bobbing along in are great for the young, Lindauer argued, because investments are essentially “on sale” at the moment.

But the perfect market for someone in their 20s is a tough one for someone in their 60s. The last few years have been extremely tough for those close to retirement. In today’s post, drawn from the same interview with Lindauer, he addresses the challenges older investors face and the downside of a down market. Continue reading

John Bogle on Morningstar and Costly Funds

John C. Bogle is without a doubt one of the most listened-to experts on mutual funds in the world. And he should be.  Having created the massive Vanguard fund complex and written eight books on the topic, the depth of his knowledge is unmatched.

Bogle was maybe the first, and has consistently remained for decades, a staunch advocate for low cost mutual fund investing.  Friday in the Wall Street Journal, he weighed in on Morningstar’s recent findings that low cost is the best predictor of a mutual fund’s outperformance, better than its own star system. Continue reading