Our mentor, Jack Bogle, gave a long interview with the editors of the Journal of Indexes. It is full of interesting and valuable quotes like these:
Anyone that's buying stocks thinking about what's going to happen next year is a fool, to be quite blunt about it. Buying stocks—owning stocks—is a lifetime endeavor. And as Mr. Buffett says—and I feel particularly strongly about this in the context of an index fund—my favorite holding period is "forever."
I love the Total Bond Market Index Fund. I started it. But it's not the answer to all things for everybody. If people are pinched for yield, I'd recommend they have a higher weighting in a corporate bond index fund.
I think for the typical investor, (international bonds) are not necessary. If you look back at the record of international bonds, I for one don't see much to write home about. I don't like the risk. I don't like the currency risk.
And let me say this about a better diversifier: "Better diversification" is the last refuge of the scoundrel. -- Anything that's done well recently is considered a great diversifier.
The three largest countries, accounting for almost half of the international index, are countries that have significant problems. But when you put them in a single package of international, you don't think about that. You ought to think about that.
There's nothing the matter with certain ETFs, properly used.
It's quite clear in the record that we used to be an industry that sold what we made, and now we're an industry that makes what will sell. And there is no finer example of this than the exchange-traded fund business.
The ETF is certainly the greatest marketing innovation so far in the 21st century. Whether it's the greatest investment innovation or best innovation for shareholders is totally in doubt.
The average mutual fund manager lasts for about six years. And 50 percent of mutual funds themselves go out of business every decade. How the heck do you invest for the long term if your fund doesn't live for the long term?
We have to get marketing out and put management in. I call it the wisdom of long-term investing versus the folly of short-term speculation. That's in the math—that is not my opinion.
We gave substance to the no-load market. All these steps—Vanguard, the index funds, the no-load decision, the multi-tiered bond funds—I'll put in one lump and say we created a better world for investors.
Although most of Mr. Bogle's remarks were about personal investing, he also speaks about government and tax policy which are topics prohibited on this forum. Please do not comment on these prohibited topics.
The Bogle Interview: Big Picture, Big Challenges