I recently subscribed for AARP membership. When I received my first August/September issue of the AARP magazine, imagine my delight to read a five page interview with Jack Bogle and AARP's Jack Otter. The article included a full page picture of our mentor, Jack Bogle, astride the industry!
These are excerpts by Jack Otter with a last reply by Jack:
All the excerpts below are by Jack:"Twenty years of writing about Wall Street has taught me two key lessons: 1. Financial markets appear endlessly complex. The secret to understanding and mastering savings and investments is to keep it simple. 2. Most of that complexity is just noise."
"No one has done more to simplify Wall Street than John C. 'Jack' Bogle. He is the founder of Vanguard, the world's largest mutual fund company, with more than $4 trillion in assets. He is also the creator of the index fund, which lets you participate in the stock market in ways far safer and at lower cost than picking individual stocks."
"You organized Vanguard to be owned by shareholders, rather than publicly traded or privately owned. Someone estimated you'd be worth $28 billion of you'd gone that route. Where has the $28 billion gone?
Jack Bogle: "Into the pockets of our shareholders."
Best wishes."You want some bonds in your portfolio, for safety. But you also need stocks for growth.
"If you have a 7% return your dollar will double in 10 years."
"The stock market is a distraction to the business of investing. -- Don't do something, just stand there."
"The big advantage to investors is the instant diversification that comes with funds, versus buying individual stocks or bonds."
"The cost of money management detracts, dollar for dollar, from your investment returns."
"Absolutely no one knows what the stock market is going to do tomorrow, let alone next year. Nor which sector, style or region will lead and which will lag. Given this absolute uncertainty, the most logical strategy is to invest as broadly as possible."
"When you allocate your assets, you also have to think about how much you get from Social Security."
"In 1993, I wrote that U.S. corporations get about 50% of their profits from international sources. So if you own a U.S. stock funds, you already own an international fund. Since then the U.S. market is up about 720%, and the non-U.S. stock market is up about 230%. and you are taking currency risk if you invest overseas. That doesn't mean I'll be right in the future. -- I would limit yourself to 20% of your portfolio in foreign stocks."
"Dollar cost averaging is a way of getting the average price over time and not putting all your eggs in a one "time" basket, as it were."
"Annuities are highly complex and are sold by people who may not understand them themselves. Variable annuities are very dangerous because they can't always deliver what they promise. -- I probably prefer an immediate annuity, which starts paying you right away."