Got a Question for Jack Bogle? Q&A with Jack at DH VII

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
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Mel Lindauer
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Got a Question for Jack Bogle? Q&A with Jack at DH VII

Post by Mel Lindauer »

Hello Everyone:

I'll have the pleasure of moderating a Question and Answer session with Jack Bogle at Diehards VII in San Diego on Sept. 23rd.

Since many of you won't be able to attend to ask your questions in person, you can post your question(s) for Jack right here on this thread. Shortly before DH VII, I'll consolidate all the accumulated questions by subject matter, and then ask Jack to respond to as many as time allows.

Fire away!

Best regards to all,

Mel
Last edited by Mel Lindauer on Fri Sep 05, 2008 2:44 pm, edited 1 time in total.
fidelio
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Post by fidelio »

mel, ok, here is your first question/s.

would mr. bogle comment on vanguard's new managed payout funds?

did mr. bogle have any input in this new series of products, or was it something he contemplated during his time at vanguard? if not, what does he think of them?

would mr. bogle put his money in one of these funds, and if so, which of the three?

thank you,

artie
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Post by Stevewc »

Mel,
What are Mr. Bogle's thoughts and feelings about the direction of Vanguard since he retired? Are the new director's/managers staying the course that he envisioned for vanguard and its clients?
Thanks Steve
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Post by chaz »

Mr. Bogle, Are we ina recession, and, if so, when could we expect to see its end and an improvement in our economy?

Thank you.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
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HueyLD
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Post by HueyLD »

Mr Bogle,

Have you changed your opinion on ETFs yet? It is increasingly evident that ETFs are the lower cost and more affordable version of traditional indexed mutual funds. Thank you in advance for your thoughts.
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ddb
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Post by ddb »

Mr. Bogle:

In light of recent products which provide very low-cost access to foreign stocks*, what percentage of an investor's equity position do you believe should be invested in foreign stocks?

(*particularly VEA at 12bps per year and VWO at 25bps per year, both with low turnover)

Thanks!
DDB
"We have to encourage a return to traditional moral values. Most importantly, we have to promote general social concern, and less materialism in young people." - PB
Retired Angler
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Question for J.Bogle?

Post by Retired Angler »

I have heard you talk about how relatively flat the market has really been over the past five years and how we could very well finally see some sizable market moves upwards over the next 5-7 years. Do you still have this view and why?
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Post by idahospud »

Retired Angler wrote:we could very well finally see some sizable market moves upwards over the next 5-7 years.
very intriguing, if this really is what Mr. Bogle said. Everything I run accross is that John Bogle still feels that equity returns will remain below historic returns (i.e. 5-7 percent instead of 9-11 percent.)

Retired Angler can you link to a quote where J Bogle says or hints at what you claim? I really would consider it interesting.
Bigfoothunter
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Post by Bigfoothunter »

I would be interested in Mr. Bogle's view on:

1) traded REITS for portfolio diversification
2) life cycle funds as a single investment for 401K versus buying index funds

Thanks for coordinating this. Bigfoot.
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stratton
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Post by stratton »

Has Mr. Bogle ever invested in Bogle Funds?

Paul

PS Mel, if this is too prying please ditch it.
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Post by Mel Lindauer »

stratton wrote:Has Mr. Bogle ever invested in Bogle Funds?

Paul

PS Mel, if this is too prying please ditch it.
Hi Paul:

I think that's an interesting question, so we'll see if we can work it in.

Regards,

Mel
Xenophon
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His view on

Post by Xenophon »

investing for stagflation. Given that he has particular insight into the previous period of this condition. Also, his view on the question of commodities v TIPS v the other strategies that have been debated here on that subject.
I've seen the blogsphere, and it looks nothing like Hamlet.
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J.Bogle Comments

Post by Retired Angler »

He was speaking on an MSNBC interview with one of the talking heads and stressed how important it was to pass your principal on to the next generation because the market has been relatively flat the past seven years or going back even ten years so you need to look at your investment returns over more than one generation. He showed graphs to back up his statements - as usual. He stated the next 5-7 years should see an upswing in what has been a relatively slow market the past few years. I usually watch MSNBC with barely one eye - but that got my attention.
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Post by idahospud »

Thanks Retired Angler,

It will be interesting to see if he answers your question. If it was something he just said in passing or if it was something more important.

The problem with well known people (like John Bogle) who are constantly in the spotlight is that they can never say something "just in passing" without some of us thinking it might be important - and maybe it is.
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Re: J.Bogle Comments

Post by blackball »

Retired Angler wrote:He was speaking on an MSNBC interview with one of the talking heads and stressed how important it was to pass your principal on to the next generation because the market has been relatively flat the past seven years or going back even ten years so you need to look at your investment returns over more than one generation. He showed graphs to back up his statements - as usual. He stated the next 5-7 years should see an upswing in what has been a relatively slow market the past few years. I usually watch MSNBC with barely one eye - but that got my attention.
I wonder what market he's been following. I show Canadian and EAFE with compounded annual returns averaging over 10% in the last seven years :D

What's his take on more international diversification?
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bob90245
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Re: J.Bogle Comments

Post by bob90245 »

blackball wrote:
Retired Angler wrote:He was speaking on an MSNBC interview with one of the talking heads and stressed how important it was to pass your principal on to the next generation because the market has been relatively flat the past seven years or going back even ten years so you need to look at your investment returns over more than one generation. He showed graphs to back up his statements - as usual. He stated the next 5-7 years should see an upswing in what has been a relatively slow market the past few years. I usually watch MSNBC with barely one eye - but that got my attention.
I wonder what market he's been following. I show Canadian and EAFE with compounded annual returns averaging over 10% in the last seven years :D

What's his take on more international diversification?
Good point! Let's frame this into a question for Mr. Bogle.

Given the US Total Stock Market has been mostly flat over the prior 10 years due to the bubble valuations in the late 1990s, what would you consider a proper balance between US and international? I might add that the EAFE never suffered from bubble valuations and has performed nicely these past 10 years.

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ddb
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Re: J.Bogle Comments

Post by ddb »

bob90245 wrote:I might add that the EAFE never suffered from bubble valuations and has performed nicely these past 10 years.
Whether you classify EAFE performance from 2000-2002 aa a bursted bubble or not, the total return was actually even worse than that of the S&P 500, so I'm not sure what you're trying to say. Here are the sequences of annual returns for 2000, 2001, and 2002 (respectively):

S&P500: -9.10%, -11.88%, -22.10%
EAFE: -16.16%, -21.44%, -15.94%

(S&P 500 data includes dividend reinvestment, EAFE data is in US dollars with dividends reinvested, net of local tax withholdings)

During this period, the S&P500 lost a total of 37.60% while the EAFE lost a total of 44.63%.

Of course, EAFE has had a much steeper recovery since 2003, contributing to its much higher 10-year numbers.
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Re: J.Bogle Comments

Post by bob90245 »

ddb wrote:Whether you classify EAFE performance from 2000-2002 aa a bursted bubble or not, the total return was actually even worse than that of the S&P 500, so I'm not sure what you're trying to say.
Thank goodness you pointed out my mistake, ddb. :oops: Mel, please withdraw my question. Perhaps international diversification is not a good idea after all. :(
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bolivia
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Post by bolivia »

I would be interested in Mr. Bogle's view on:

1) importance or not of an international small cap index as a portfolio diversifier.
2) insights as to why Vanguard doesn't have an offering. Based on this board only, it's probably the most asked-for Vanguard request.
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Post by zhiwiller »

I'd be interested in knowing what Mr. Bogle thinks about the current commodities bubble and inflation. Does he think inflation is under control or does he think the numbers have been phrased in such a way by the power that be to indicate a lower inflation rate than what is really out there? And if he sees inflation as a potential future hazard what would he direct an investor to do: lay off nominal bonds, increase stock allocation, what?
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Post by Yes Virginia »

bolivia wrote:I would be interested in Mr. Bogle's view on:

1) importance or not of an international small cap index as a portfolio diversifier.
2) insights as to why Vanguard doesn't have an offering. Based on this board only, it's probably the most asked-for Vanguard request.
Can I hazard a guess?


1) Small caps are expensive and high risk.
2) Internationals are expensive and high risk.
3) Put them together and you now have a great big staggering pile of both expensive and high risk, squared.




Just my guess.
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bolivia
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Post by bolivia »

Can I hazard a guess?

1) Small caps are expensive and high risk.
2) Internationals are expensive and high risk.
3) Put them together and you now have a great big staggering pile of both expensive and high risk, squared.
Can I hazard a rebuttal?

1) More expensive compared to LC, but still within reason. Of course higher risk, but higher expected return. No free lunch.
2) International more expensive compared to LC or TSM? Hmm - let's see - Fido's Spartan International is .10 e/r. Higher risk? Hmm - it's a global world we live in today, not a S&P 500 portfolio world. No free dinner.
3) Blend SC/I into a well diversified global portfolio, with an additional pinch of appropriate fixed income to offset if you desire, and I doubt very much you'll see a great big staggering pile of expense and high risk without any reward.

bolivia
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Sphinx
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Post by Sphinx »

I have a question for Mr. Bogle.

How might Vanguard's new global stock index best be used in a portfolio?

Thanks.

:idea:
vandy
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vpccx and vwnfx

Post by vandy »

Could you please ask Mr. Bogle if vpccx and vwnfx are good ways to go in a tax deferred account if someone would like an "actively managed" funds?

Thanks for your help.

Vandy
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Post by sopogah »

Why vanguard doesn't offer high quality (mostly developed countries) international bond fund?

Any downside for investors? or it is hard to have such a fund at low cost?

Thank you.

Jack

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speedbump101
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Post by speedbump101 »

I will be at the San Diego in Sept., however JIC I don't get to ask this live:

Mr. Bogle:

We need Vanguard ETFs in Canada... Yes I know we can buy the US ETFs here, however foreign dividends are taxed harshly in Canada... Any chance of you giving Ishares Canada a run for their money 'up north?'
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Post by DRiP Guy »

Great questions. I really have none of my own, but will be very interested in his replies to the questions posed so far!

DG
mur44
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'Stay the Course' Still Applicable for 64 Year Old Retiree?

Post by mur44 »

Question for Jack Bogle:

Is it still prudent to 'Stay the Course' for retirees while
'America is on the decline'.

If 'America is on the decline' is true, then what should
a retiree do to protect his/her assets?

Thanks

Mur44
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Post by notPatience »

Question for Mr. Bogle:

What have we not asked that we should have?
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Post by Karl »

Mr. Bogle:

You've long warned about the higher risk of foreign investments, yet in a recent TV interview regarding the high level of recent market volatility you suggested a 50/50 spit of one's foreign investments between emerging markets & developed markets. This surprised me given the obvious extra risks associated with EM and how you have frequently in the past questioned if there was any need to own foreign stocks at all. (In that interview you suggested an 80/20 US/international split for one's equity allocation.)

In the past you'd suggested there was no need at all for foreign stocks as many of the huge firms in the S&P 500 or Total Stock Index get a substantial portion -- in some cases more than half -- of their earnings from overseas anyhow which you deemed to effectively provide foreign exposure even without owning any foreign stock. Has your view changed now such that you think 20% foreign is a prudent choice and is there any specific reason for your change of view on this matter? Or do you still view international stocks as an optional item that could be deleted from a portfolio without any harm?
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Post by Karl »

Mr. Bogle:

Vanguard financial plans universally avoid Total Bond Index and instead use a mix of short, intermediate, and long-term bond indexes, which effectively gives one Total Bond minus mortgage backed securities.

Why is this? Vanguard promotes the view that one should buy Total Stock Market for at least a large portion of their US equity allocation. Why not buy Total Bond Index then as well? Do you see a valid reason why mortgage-backed bonds that make up I think around a third of Total Bond should perform any differently over the long-term than a collection of the ST, IT, and LT bond funds to justify using the three indexes instead of simply buying the whole US investment grade market including mortgages in one fund?
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Post by norm »

Mr Bogle,

What is your opinion about Global Bond Funds?
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Post by nisiprius »

Mr. Bogle: a few decades ago, the rule of thumb for asset allocation was "age in bonds."

As I write this, Vanguard's Target Retirement 2030 fund, indicated as appropriate for someone aged 41-45, invests 14.2% in bonds and 85.8% in equities.

What accounts for the big difference between the conventional wisdom of the eighties and the asset allocations in today's target-date funds? (U. S. life expectancy has only increased by about two years over the past two decades).

Do you think "age in bonds minus thirty" is a reasonable allocation for a typical 44-year-old investor?
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Post by lorneabramson »

Mr. Bogle -- What are your thoughts on Burton Malkiel's current focus on China, and how does this reconcile (or not reconcile) with Efficient Markets Theory? Do you believe China should be "overweighted" versus its market capitalization weighting in emerging markets indexes (just as many domestic investors overweight the US relative to its market cap weighting in major international/global equity indexes)? Thank you!
Last edited by lorneabramson on Thu Jul 31, 2008 10:16 am, edited 2 times in total.
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Taylor Larimore
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Inappropriate question

Post by Taylor Larimore »

Hi Mel/Karl:

Karl wrote:

Vanguard financial plans universally avoid Total Bond Index and instead use a mix of short, intermediate, and long-term bond indexes, which effectively gives one Total Bond minus mortgage backed securities.


Unfortunately, the above statment is incorrect.

Vanguard selected Total Bond Market Index Funds for ALL their Life Strategy and Target Retirement Funds.

Earlier this week a Boglehead posted this Vanguard Advisor portfolio. The only bond fund recommended was Total Bond Market Index Fund.

http://www.bogleheads.org/forum/viewtop ... 1217293148

It would be improper to ask Mr. Bogle a question based on a wrong premise.

Best wishes.
Taylor
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Post by Ilovevolleyball »

Dear Mr. Bogle,

What changes would you make to Vanguard Funds? What do you think is missing? Which Funds would you close if you could? And, for Balanced Index do you think that 20% Total International, 40% Total Stock and 40% Total Bond would be better than how currently comprised?

And, most importantly, how do you feel about having so many fans? In my eyes you are the financial equivalent of a rock star, and I love your music.

Mike
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Asset allocation for new retiree

Post by Retired1809 »

First, Mr. Bogle, thank you for applying your creative genius to help investors who want a fair shake, regardless of the size of their portfolio. Your integrity and tenacity have made a diffeence for millions of investors, and through your books and appearances you are still spreading the good word. I consider you a true investment giant.

Now, my question: I know you like the Vanguard Balanced Fund. Should recent retirees with balanced portfolios in the Total Stock Market Index and Total Bond Portfolio also allocate a small portion of their portfolios to each of the following:
1. REIT index,
2. Commodity ETF (or fund),
3. Inflation-protected bond fund
4. Other?

Many thanks!

A Vanguard customer/owner for almost 30 years
reisner
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S&P 500 Index Fund

Post by reisner »

Mr. Bogle,

Do you think the Vanguard 500 Index Fund is still a wise investing choice? If so, what percentage of a stock allocation would you put in it>

Thanks,
Rob Eisner
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Post by SpringMan »

I would like to hear Mr. Bogle's thought on CCFs. Is he in Rick's camp or Larry's camp on CCFs?
Thanks,
Best Wishes, SpringMan
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Post by Mel Lindauer »

No more questions will be taken. This thread is being locked since I have to start assembling the questions for Jack's Q&A.

Best regards to all,

Mel
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