Investing : Bogle's current personal allocation

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Jpg
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Investing : Bogle's current personal allocation

Post by Jpg » Thu Dec 17, 2015 7:26 pm

Today's Charles Jaffe Personal Finance column stated that Jack Bogle said of his own portfolio: "Currently I'm 53% bonds, and 47% stocks." Very interesting. Every individual should have their own personal asset allocation based on their specific situation( ie: age, net worth, risk tolerance, and investment objectives).Although Jack's allocation seems to be a good default allocation for those who are not sure about their allocation. When in doubt 50/50 seems to be a "No Brainer allocation". Obviously Jack could be either 100% bonds or 100% stocks, and he will be fine. I would appreciate your thoughts.

mindboggling
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Re: Investing : Bogle's current personal allocation

Post by mindboggling » Thu Dec 17, 2015 10:31 pm

Since he's in his 80s and a multi-millionaire I think we can safely assume he's investing for his heirs.

steve
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ofcmetz
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Re: Investing : Bogle's current personal allocation

Post by ofcmetz » Fri Dec 18, 2015 3:03 am

That's a very balanced portfolio. He's investing for more than one generation and what better way than 50/50.
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sawhorse
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Re: Investing : Bogle's current personal allocation

Post by sawhorse » Fri Dec 18, 2015 3:26 am

I wonder why he does 53/47 instead of 50/50.

JoinToday
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Re: Investing : Bogle's current personal allocation

Post by JoinToday » Fri Dec 18, 2015 3:32 am

sawhorse wrote:I wonder why he does 53/47 instead of 50/50.
He recognizes that 53/47, 50/50, or 47/53 are all close enough.

I used to be anal over making sure my allocation was perfectly balanced when I re balanced. To the cent (or within a few cents). I realize it doesn't matter.
I wish I had learned about index funds 25 years ago

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stemikger
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Re: Investing : Bogle's current personal allocation

Post by stemikger » Fri Dec 18, 2015 5:44 am

Harry Markowitz won the Nobel Prize in Economics for his pioneering work in Modern Portfolio Theory, which says that a rational investor should pick an “efficient” portfolio that uses a mix of assets to maximize the expected portfolio return for a given level of risk.

But what did Harry Markowitz actually hold in his own personal portfolio? What was his investment strategy?

Mr. Markowitz was then working at the RAND Corporation and trying to figure out how to allocate his retirement account. He knew what he should do: “I should have computed the historical co-variances of the asset classes and drawn an efficient frontier.” (That’s efficient-market talk for draining as much risk as possible out of his portfolio.)

But, he said, “I visualized my grief if the stock market went way up and I wasn’t in it — or if it went way down and I was completely in it. So I split my contributions 50/50 between stocks and bonds.”

I held the couch potato portfolio for many years which was 50/50 The Total Stock Index and the Total Bond Index. I think it is a great compromise if you don't want to worry about things. I was much younger and realize I was too conservative for my age. I'm 51 now and I am happy at 65/35. However, there is nothing wrong with 50/50 for life, if you want to leave some behind.
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Robert T
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Re: Investing : Bogle's current personal allocation

Post by Robert T » Fri Dec 18, 2015 6:18 am

.
I found this earlier article interesting: An inside look at Jack Bogle's portfolio.

Here's an extract, my underline - "these funds are broadly diversified largely with a value orientation, which is deliberate on my part."
.

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Re: Investing : Bogle's current personal allocation

Post by bayview » Fri Dec 18, 2015 6:23 am

sawhorse wrote:I wonder why he does 53/47 instead of 50/50.
Perhaps he hasn't rebalanced in a while, and it has grown from 50/50.

The last few months might help with that. :?
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dkturner
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Re: Investing : Bogle's current personal allocation

Post by dkturner » Fri Dec 18, 2015 7:30 am

bayview wrote:
sawhorse wrote:I wonder why he does 53/47 instead of 50/50.
Perhaps he hasn't rebalanced in a while, and it has grown from 50/50.

The last few months might help with that. :?
I don't think he ever engages in formula rebalancing, but he has been known to change his equity/fixed income allocation based on his perceptions of current risks. The classic example being 1999-2000 when he acknowledged that he greatly reduced his equity allocation. He has commented that he made the change for a variety of sensible reasons, including being cognizant of the then high current level of equity prices.

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Jpg
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Re: Investing : Bogle's current personal allocation

Post by Jpg » Fri Dec 18, 2015 8:26 am

I am 54, and will probably be approximately 50/50 for a long time. Warren Buffett's Mentor ( Ben Graham) said " never be more than 75% equities, or less than 25% equities. Warren and Ben studied this a lot more than I have.I have observed people get burned with 100% stocks, and I have seen people miss a lot of opportunities because they were 100% bonds. I have never found anyone who has been burned with 50/50 in total market index funds.

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goingup
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Re: Investing : Bogle's current personal allocation

Post by goingup » Fri Dec 18, 2015 10:34 am

bayview wrote:
sawhorse wrote:I wonder why he does 53/47 instead of 50/50.
Perhaps he hasn't rebalanced in a while, and it has grown from 50/50.

The last few months might help with that. :?
Right. He's stated he is not one for "slavish" rebalancing.

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