Bogle puts a bow on it in under 15 minutes

[TheTimeLord]

I originally came across this video in a post from stemikger. Personally I think I will watch it at least once a month for the remainder of my active investing life, maybe weekly. The video and the approach from Mr. Bogle just hit home with me.

https://www.youtube.com/watch?v=k6ra5POdsYg

[nedsaid]

John Bogle is one of those rare people that the more you see him being interviewed, the more impressed you are by him. Plain spoken and direct. He explains the investment markets in plain English. He keeps things simple when most investment experts want to make them complicated.

His recommended portfolio of 65% stocks and 35% bonds for most investors makes a lot of sense. I also like that he pays attention to valuations and is willing to make changes accordingly as he did in 2000. So he certainly isn't a market timer except when valuations get so compelling that you can't ignore them.

If you click the link, you will see a whole series of Bogle interviews. A couple hours watching them is well worth the time.

[TheTimeLord]

If you click the link, you will see a whole series of Bogle interviews. A couple hours watching them is well worth the time.

I watched a couple other including the one on DCA which basically fell inline with what I believe. I think it mentioned using a 4 year time frame if you decided to DCA instead of lumpsum which he cited as superior in most cases but also pointed out the risk of by chance selecting the wromg day.

[bondsr4me]

Thanks for the link....I am gonna watch the other videos too.
I must say though, I hear a little "market timing" in his comments.... just my opinion.
If you adjust your asset allocation for health reasons to preserve wealth for survivors, that tells me it was out of balance in the first place. After all, when it comes to our mortality, some day, tomorrow is not gonna come... whether it is a heart attack, stroke, car accident.
I want to be very clear though, I think Jack Boyle has done, and still does more for individual investors than anyone has in this business.
If you need a mentor, you don't need to look any further than Jack or Warren B.
Happy Thanksgiving to everyone,
Don

[4nursebee]

Market timing son of a gun!

[QQQQ]

Watched and like his videos also. Easy for non experienced one like me to understand. I've always tried hard to listen to all the advisors I've talked to in the past many yrs. I always asked questions. Thing I do not understand is why not one of them ever advised BH investing approach.

[hoppy08520]

...I've always tried hard to listen to all the advisors I've talked to in the past many yrs. I always asked questions. Thing I do not understand is why not one of them ever advised BH investing approach.

Easy answer: If you invest like a Boglehead, then they don't get paid.

[Toons]

Brilliant.Thanks for the link

[LazyNihilist]

This video is part of an interview.

http://www.youtube.com/watch?v=SLUN_iUfudw
http://www.youtube.com/watch?v=gkkk-9Pi2T0
http://www.youtube.com/watch?v=xwY7jEv0Q4k
http://www.youtube.com/watch?v=VkN5vCariSc

Brilliant interview. Bogle is so modest and full of common sense.

[stemikger]

I originally came across this video in a post from stemikger. Personally I think I will watch it at least once a month for the remainder of my active investing life, maybe weekly. The video and the approach from Mr. Bogle just hit home with me.

https://www.youtube.com/watch?v=k6ra5POdsYg

+1

This is a great practice TimeLord. Another tip is when you are tempted to do something you might regret, ask the question here. Last year, I ditched my 65/35 AA in favor of going all stocks like Warren Buffett suggested. I actually did it for a few months but asked the question as if I didn't do it yet. The responses I got here were brilliant and really got me thinking. Watching Jack's videos and going back to all those smart replies, it really helps me protect myself from myself. I went back to 65/35 and no longer care or watch what the market is doing daily.

Please note, I'm not second guessing Warren B. but I'm not Warren B., I'm just little old Steve G. and I will not be able to stomach seeing 20 years worth of savings go down 50% in a scary market which may come again in my lifetime and may not. I don't know, so that is why I need to follow Jack's advice and use bonds as a diversifier and hope they do their job.

[pkcrafter]

Thanks for sharing the link. The video was like listening in on a very informal conversation over coffee.

Paul

[Fallible]

I originally came across this video in a post from stemikger. Personally I think I will watch it at least once a month for the remainder of my active investing life, maybe weekly. The video and the approach from Mr. Bogle just hit home with me.
https://www.youtube.com/watch?v=k6ra5POdsYg

It's a great interview and thanks to you and to LazyNihilist for posting links to the rest of it. Poster pkcrafter noted these are like "listening in on an informal conversation with a cup of coffee" and I agree. The setting was such that a viewer could feel he or she was actually sitting across from Jack in a one-on-one.

A caveat: the English subtitles have many typos and incorrect words.

[Dandy]

So he certainly isn't a market timer except when valuations get so compelling that you can't ignore them.

I don't disagree with his approach. But it does set up a contradiction between "stay the course" vs when valuations get too high you don't stay the course. Once you take a "tactical" move, say to reduce equity risk, you are lumped in by many,as a market timer.

He is much more flexible than many of his followers. There is a range of people who don't fixate on stay the course - from day traders to people who make a move with a portion of their assets tactically every once in awhile. Putting the same label on the whole spectrum is misleading and often an intentional way to dismiss or not deal with the complex subject.

There is a feeling that an equity risk at a percentage allocation, say 65% is always the same risk. When valuations soar the same 65% equity allocation has more risk -- it just has the same percentage number. How, when do you assess that valuations are too high? Not an easy thing to do. The default is make no move (stay the course) often a wise but not the only wise move. Rebalancing is a good way to help reduce risk but there are times when more might be warranted. I think that is what Mr. Bogle is getting at when he said for a very overvalued market going from 65% to 50%.

If a regular member of the forum suggested that he would likely get a lot of flack. So, I wish some of the better minds on this forum would spend some time on how we might gauge market valuations that might be getting extreme. We get plenty of reinforcement for staying the course but not so much on possible tactical moves suggested by Mr. Bogle. For retirees that are a bit more focused on asset preservation that would be helpful.

[matjen]

Great video. Thanks for the link!

[LazyNihilist]

If a regular member of the forum suggested that he would likely get a lot of flack. So, I wish some of the better minds on this forum would spend some time on how we might gauge market valuations that might be getting extreme. We get plenty of reinforcement for staying the course but not so much on possible tactical moves suggested by Mr. Bogle.

We Bogleheads have out Bogled Bogle.

[Stonebr]

If a regular member of the forum suggested that he would likely get a lot of flack. So, I wish some of the better minds on this forum would spend some time on how we might gauge market valuations that might be getting extreme. We get plenty of reinforcement for staying the course but not so much on possible tactical moves suggested by Mr. Bogle.

We Bogleheads have out Bogled Bogle.

My take: Bogle says he sold his stocks in 2000 in part because he recently had a heart transplant. This in my opinion is a legitimate reason to reassess risk tolerance and change asset allocation. He implied that it was probably pure luck that ridiculously high valuations coincided with the decision.

[TheTimeLord]

If a regular member of the forum suggested that he would likely get a lot of flack. So, I wish some of the better minds on this forum would spend some time on how we might gauge market valuations that might be getting extreme. We get plenty of reinforcement for staying the course but not so much on possible tactical moves suggested by Mr. Bogle.

We Bogleheads have out Bogled Bogle.

My take: Bogle says he sold his stocks in 2000 in part because he recently had a heart transplant. This in my opinion is a legitimate reason to reassess risk tolerance and change asset allocation. He implied that it was probably pure luck that ridiculously high valuations coincided with the decision.

In the first minute he pretty much recommends moving 15% from stocks to bonds if the market is substantially overvalued (his definition seems to be somewhere north of 25%). Apparently this is advice he gave previously at a Morningstar conference in the spring of 2000 according to the video around the 2:30 mark.

[investor1]

In the video from the OP, Jack is talking about asset allocation and adds that timing the market is a good thing if you are smart enough to identify when stocks are heavily over valued even when you are invested in whole market index funds, then he adds that:

Jack Bogle - If you are smart enough and reducing your allocation to stocks and increasing your allocation to bonds, somebody else is reducing their allocation to bonds and increasing their allocation to stocks.

But that isn't correct. You are not necessarily selling all of your stocks that you are selling to the same people you are buying bonds from. In fact, you have no idea what they are doing with the money to give them in exchange for their bonds. Maybe they are retired and living off of that money, maybe they are investing in a different market such as real estate or commodities.

I don't really understand why Jack thought that was so important to remember. I guess it was a point about competition and strategy and that while you are doing one thing, others are doing something else.

[Dandy]

My take: Bogle says he sold his stocks in 2000 in part because he recently had a heart transplant. This in my opinion is a legitimate reason to reassess risk tolerance and change asset allocation. He implied that it was probably pure luck that ridiculously high valuations coincided with the decision.

That may be true and a valid reason for reassessing your risk tolerance. But Jack's comments the OP referenced weren't limited to that type of life changing situation. They were based on stock valuations that were fairly extreme not limited life changing events.

[dbCooperAir]

I really liked the first video in the series when talks about how he grew up and those first few years of college. To bad you can't hear the interviewer.
https://www.youtube.com/watch?v=SLUN_iUfudw

I liked the part about him getting a D in his first economic class, just about lost his scholarship. The fact that he started with nothing and built what he did is great American story.

He gave credit to what he recalls the first index fund by Wells Fargo. That got me thinking what it would look like today if Wells Fargo would of used the S&P 500 index rather than the other index they used.

[Fallible]

I really liked the first video in the series when talks about how he grew up and those first few years of college. To bad you can't hear the interviewer.
https://www.youtube.com/watch?v=SLUN_iUfudw
...

You should be able to hear the interviewer just by turning your sound way up, but you can also read him from the subtitle (although as I mentioned before, there are some typos and incorrect words in these subtitles).

[mjb]

Nice find.

We need more Jack Bogles.

[TheTimeLord]

I originally came across this video in a post from stemikger. Personally I think I will watch it at least once a month for the remainder of my active investing life, maybe weekly. The video and the approach from Mr. Bogle just hit home with me.

https://www.youtube.com/watch?v=k6ra5POdsYg

Seems like a good time to give this post a bump.

[stonerolled]

thank you Mr. Bogle for even using the following word, not with merrill lynch, not with Edward jones did I learn it...

"A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.

—Lord Millett, Bristol and West Building Society v Mothew[3]"
from Wikipedia...

and YES I also have needed this reinforced many times over and over and am grateful for "don't just do something, stand there".

[IlliniDave]

So he certainly isn't a market timer except when valuations get so compelling that you can't ignore them.

I don't disagree with his approach. But it does set up a contradiction between "stay the course" vs when valuations get too high you don't stay the course. Once you take a "tactical" move, say to reduce equity risk, you are lumped in by many,as a market timer.

He is much more flexible than many of his followers. There is a range of people who don't fixate on stay the course - from day traders to people who make a move with a portion of their assets tactically every once in awhile. Putting the same label on the whole spectrum is misleading and often an intentional way to dismiss or not deal with the complex subject.

There is a feeling that an equity risk at a percentage allocation, say 65% is always the same risk. When valuations soar the same 65% equity allocation has more risk -- it just has the same percentage number. How, when do you assess that valuations are too high? Not an easy thing to do. The default is make no move (stay the course) often a wise but not the only wise move. Rebalancing is a good way to help reduce risk but there are times when more might be warranted. I think that is what Mr. Bogle is getting at when he said for a very overvalued market going from 65% to 50%.

If a regular member of the forum suggested that he would likely get a lot of flack. So, I wish some of the better minds on this forum would spend some time on how we might gauge market valuations that might be getting extreme. We get plenty of reinforcement for staying the course but not so much on possible tactical moves suggested by Mr. Bogle. For retirees that are a bit more focused on asset preservation that would be helpful.

Good post.

It's pretty obvious from the interview (and his body of written) that when he says "stay the course" he doesn't mean one is required to mindlessly lock the rudder and ignore the winds and currents. It is also pretty clear from the video (and his writing) that what he discourages unquestionably is market timing in the macro sense, i.e., jumping completely in and out of markets with significant periods in between "on the sidelines". There is a wide continuum of strategies out there, and for each individual investor there is a sweet spot on the continuum that best fits the investors goals, needs, financial situation, and temperament. Out of necessity when speaking to large audiences he has to condense things to a few core ideas. The "soundbites" don't completely define his philosophy.

And you are correct--if he showed up here under under an anonymous username and participated in the day-to-day conversation he would likely be branded a heretic in some respects

He's a pretty amazing guy who's been a profound influence on me. Unfortunately I have only known about him for the last 5 or so years. Better late than never.

[stemikger]

I originally came across this video in a post from stemikger. Personally I think I will watch it at least once a month for the remainder of my active investing life, maybe weekly. The video and the approach from Mr. Bogle just hit home with me.

https://www.youtube.com/watch?v=k6ra5POdsYg

I think you picked the right time to bump this TTimeLord. Jack's videos have saved me from myself more often then I can count. This forum has also talked me down from the stupid ledge the same amount of times.

Not too long ago I saw a great video where Jack himself was asked if he ever gets nervous about the markets and he said sure and when he does, he goes back and reads his own books. LOL. I loved that!!

[Average Investor]

I originally came across this video in a post from stemikger. Personally I think I will watch it at least once a month for the remainder of my active investing life, maybe weekly. The video and the approach from Mr. Bogle just hit home with me.

https://www.youtube.com/watch?v=k6ra5POdsYg

Great video, thanks for sharing!

[staythecourse]

Not too long ago I saw a great video where Jack himself was asked if he ever gets nervous about the markets and he said sure and when he does, he goes back and reads his own books. LOL. I loved that!!

I think this is important for folks to hear. Fear is natural and when the markets crumble EVERYBODY gets scared. That is normal. What he, and the rest of us, have to understand is that is normal, but having those visceral reactions should not alter a sound investment plan.

Good luck.

[dc81584]

I think his approach is fine. Staying the course is one thing, but ignoring information that legitimately concerns you is quite another. Also, he's formally trained to analyze and understand financial markets, so it's not as if he can't separate fact from fiction. Given that his asset allocation is reasonable to begin with, a slight shift due to life circumstances or yes, even a sense that valuations are ridiculously high, isn't exactly an unwise or ill-advised move.

[stemikger]

I think his approach is fine. Staying the course is one thing, but ignoring information that legitimately concerns you is quite another. Also, he's formally trained to analyze and understand financial markets, so it's not as if he can't separate fact from fiction. Given that his asset allocation is reasonable to begin with, a slight shift due to life circumstances or yes, even a sense that valuations are ridiculously high, isn't exactly an unwise or ill-advised move.

Jack's approach is staying the course in all types of weather. I think there are very few circumstances you should change. Sure stocks are high, bonds are high and according to Jack, the returns for both are going to be low for the next decade. What should you do? Take, more risk? Not if you are in your mid 50s and want to retire in a decade or less. The only logical think is to save more, expect less, but don't change course now.

65/35 stocks-bonds seems to be a very intelligent AA for someone in their 50s. Due to the fact my wife has no interest in personal finance, that at this point I'm 52 and my wife is 55 if I had the option in my 401K I would hold the Vanguard Balanced Index Fund for the rest of my life. My home is paid off, what I would receive from social security I could live on if all else fails, so the 60/40 in that fund seems to be a good balance between growth and safety.