The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

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heartwood
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The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by heartwood » Sat Oct 07, 2017 10:50 pm

Fully valued.

https://www.thestreet.com/story/1433362 ... bogle.html

""One thing that I strongly urge: Don't ever, ever, ever if you're an investor think of being out of the market or in the market," Bogle said. Instead, an investor should adjust his or her asset allocation."

Apologies if already posted.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by Stormbringer » Sun Oct 08, 2017 1:39 am

Warren Buffett agrees.
Warrent Buffet wrote: valuations make sense with interest rates where they are
However, note that neither of them says "overvalued".
"Compound interest is the most powerful force in the universe." - Albert Einstein

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by smesman » Sun Oct 08, 2017 3:02 am

When could we truely say they were overvalued though? When the YTM of treasuries is higher than stock earnings?

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by sambb » Sun Oct 08, 2017 3:05 am

I dont understand how buffet or bogle saying this, is any different than people here who say "Im thinking of going all cash".
I doubt this thread is actionable, so it will probably be locked. I dont base my investment decisions on 90+ year old men's thoughts about the market.
But, we are due for a bear market maybe. Maybe not. Who knows.
Glad they are able to make the headlines though.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by lazyday » Sun Oct 08, 2017 4:34 am

smesman wrote:
Sun Oct 08, 2017 3:02 am
When could we truely say they were overvalued though? When the YTM of treasuries is higher than stock earnings?
Stocks are riskier, so we should demand a higher return than from bonds.

There was an old post by Larry Swedroe, I think on some index funds forum, sometime around 1999-2001. As I recall, he compared the expected returns from large US stocks (maybe by adding dividend yield to expected growth) to the real yield from long term TIPS.

TIPS had a higher expected real return with much less risk.

I think it made sense at that time to own 0% S&P 500.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by lazyday » Sun Oct 08, 2017 4:41 am

sambb wrote:
Sun Oct 08, 2017 3:05 am
I dont base my investment decisions on 90+ year old men's thoughts about the market.
I like to listen to the thoughts of people who have more experience than I, and then make my own decisions.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by magneto » Sun Oct 08, 2017 5:17 am

"I believe strongly that [investors] should be realizing valuations are fairly full, and if they are nervous they could easily sell off a portion of their stocks.," said Bogle, adding that investors should not sell much." JB

This is a very very qualified statement; difficult to gainsay.

In fact any investor whether valuations aware or not, nervous or not, can interpret how they please and then carry on how they please.

It may perhaps be more relevant for the 100%ers to check they are still totally comfortable.
Otherwise what to do?

It is hardly news that Stocks are fully valued, IMHO with about 10% headroom.
But that tells us little about investor exuberance or otherwise, and effects on future pricing.
Have been defensive for some time now and will stay that way for foreseeable future 'to stay our own particular course'.
'There is a tide in the affairs of men ...', Brutus (Market Timer)

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by lazyday » Sun Oct 08, 2017 6:03 am

I like the suggestion by Howard Marks:
You invest, but with caution. You should certainly have less risk exposure today than you would have had five or seven years ago.
Combined with Bogle at the end of the video, "moderate adjustments".

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by z3r0c00l » Sun Oct 08, 2017 6:13 am

Doesn't mean much if earnings keep going up.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by midareff » Sun Oct 08, 2017 6:53 am

The fly in the ointment is that treasuries are so inflated they are paying (relatively) zilch. The ten year is at 2.3% or thereabouts and Total International is providing a dividend of roughly 2.5% - 2.6%. The world has gone upside down.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by Ron Scott » Sun Oct 08, 2017 6:55 am

You could stand in the middle of 5th Avenue and shoot someone and no one here would care.

But suggest that its time to pull back from the stock market or not put more money in it and you're a fool or worse.

That I can tell you...

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by jhfenton » Sun Oct 08, 2017 7:30 am

sambb wrote:
Sun Oct 08, 2017 3:05 am
I dont understand how buffet or bogle saying this, is any different than people here who say "Im thinking of going all cash".
I doubt this thread is actionable, so it will probably be locked. I dont base my investment decisions on 90+ year old men's thoughts about the market.
But, we are due for a bear market maybe. Maybe not. Who knows.
Glad they are able to make the headlines though.
Mr. Bogle is saying the opposite of "go all cash." He's saying that you might consider making moderate allocation changes to reflect the market's apparent "full valuation," but that you shouldn't view allocation decisions as an all or nothing thing.

And I think that makes perfect sense. Two years ago, we were 100% equities and always had been. Gradually over the last two years, we've moved to 80/20, partly a reflection of the sudden realization that we're much closer to retirement at 47 than we are to the start of our careers, but also partly a reflection of relative valuations. That's also why we're slightly over 50% international with about half of that in emerging markets. But as Mr. Bogle said, we're not all in or all out of the market, U.S. or otherwise.

Folks may scream market timing, but it's just reality. If the late 2015 to February 2016 swoon had continued, and we were in the middle of a two-year bear market, we'd probably still be 100% equities. And I'd be quite happy about it.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by AlohaJoe » Sun Oct 08, 2017 7:49 am

If Bogle thinks stocks are fully valued today then I guess that means he thought they were undervalued a year ago, as they've gone up over 17% since then.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by CyclingDuo » Sun Oct 08, 2017 7:57 am

sambb wrote:
Sun Oct 08, 2017 3:05 am
I dont understand how buffet or bogle saying this, is any different than people here who say "Im thinking of going all cash".
I doubt this thread is actionable, so it will probably be locked. I dont base my investment decisions on 90+ year old men's thoughts about the market.
Neither are 90, let alone 90+.

Warren is 87, and Jack is 88. :D :mrgreen:

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by lazyday » Sun Oct 08, 2017 8:16 am

CyclingDuo wrote:
Sun Oct 08, 2017 7:57 am
Warren is 87, and Jack is 88. :D :mrgreen:
Wow, the google card (wikipedia) says Charlie Munger and Marty Whitman are both 93!

Howard Marks is just a kid at 71.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by packer16 » Sun Oct 08, 2017 8:22 am

Changing your allocation for valuation (except at the extremes & both Buffet & Bogle say we are not at extremes) is typically a poor idea due in part to opportunity cost. At current valuations the opportunity cost of holding stocks vs. bonds is 4 to 5% per year, quite a a large price over longer stretches of time. If folks are changing their allocations primarily to protect gains that they will need for income in the near future that is a completely appropriate as a part of an accumulation/distribution plan.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by lostdog » Sun Oct 08, 2017 8:47 am

Noise. Stick to your plan.
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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by DaufuskieNate » Sun Oct 08, 2017 8:47 am

I have a 2007 edition of Mr. Bogle's The Little Book of Common Sense Investing. Here is a quote:
...the mostly likely investment return on stocks would be in the range of 7 to 8 percent. I'll be optimistic and project an annual investment return (a bit nervously!) averaging 8 percent.
This was a projection for 10 year returns on U.S. Stocks. Looking at Portfolio Visualizer returns for the period of September 2007 through September 2017, VFINX returned 7.64% and VTSAX returned 8.00%. Pretty good forecast.

During this 10-year period, stock returns were positive in 9 of 10 years, and were in excess of 8% in 7 of 10 years. It's a mistake to look at very recent performance and assume that a longer term forecast makes no sense.

Another quote from the same book: "It is dangerous...to apply to the future inductive arguments based on past experience." Translation: Mr. Bogle warns strongly against assuming that historical returns will continue into the future. Based on all the conflicting feelings on this topic throughout the forum, I would say this is one lesson from Mr. Bogle that many Bogleheads find hard to swallow.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by munemaker » Sun Oct 08, 2017 9:02 am

AlohaJoe wrote:
Sun Oct 08, 2017 7:49 am
If Bogle thinks stocks are fully valued today then I guess that means he thought they were undervalued a year ago, as they've gone up over 17% since then.
Not necessarily. Earnings have generally increased since then.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by rgs92 » Sun Oct 08, 2017 9:06 am

I thought fully-valued meant stocks should now generate their long-term average returns (over that long term).

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by AlohaJoe » Sun Oct 08, 2017 9:09 am

munemaker wrote:
Sun Oct 08, 2017 9:02 am
AlohaJoe wrote:
Sun Oct 08, 2017 7:49 am
If Bogle thinks stocks are fully valued today then I guess that means he thought they were undervalued a year ago, as they've gone up over 17% since then.
Not necessarily. Earnings have generally increased since then.
True but valuations have gone up. Today CAPE10 is 31.11. In January 2016 it was 24.21. That's, what?, a 30% increase?

It is logically (& mathematically) impossible for Bogle to consider the market fully valued today if he didn't think they were undervalued 12-18 months ago. He gives interviews repeatedly but never in 2016 did he say that markets were undervalued.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by DaufuskieNate » Sun Oct 08, 2017 9:19 am

AlohaJoe wrote:
Sun Oct 08, 2017 9:09 am

It is logically (& mathematically) impossible for Bogle to consider the market fully valued today if he didn't think they were undervalued 12-18 months ago. He gives interviews repeatedly but never in 2016 did he say that markets were undervalued.
Let's test your logic here. If valuations go up, the market must have been under-valued before. So, up until valuations hit their peak, the market must be under-valued. I don't think this is logical at all. Valuations are a relative concept. Stocks can be over-valued relative to their fundamentals and still go higher. Happens all the time.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by dbr » Sun Oct 08, 2017 9:34 am

I target a 50% allocation to equities. Can someone advise me by how much I should reduce that in view of current conditions? What bond fund should I use for the shift, or maybe CDs?

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by goingup » Sun Oct 08, 2017 10:40 am

Thanks for the article. When Jack speaks, it's wise to pay attention. Not sure what is to be done rather than motor on with an AA that feels appropriate, however.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by ThePrince » Sun Oct 08, 2017 11:02 am

heartwood wrote:
Sat Oct 07, 2017 10:50 pm
Fully valued.

https://www.thestreet.com/story/1433362 ... bogle.html

""One thing that I strongly urge: Don't ever, ever, ever if you're an investor think of being out of the market or in the market," Bogle said. Instead, an investor should adjust his or her asset allocation."

Apologies if already posted.
I’m not agreeing or disagreeing with Mr. Bogle, but his and similar comments we read and hear from others remind me that some of these people will someday be proven right, but that is only because they have been prognosticating the same result each year, every year.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by avalpert » Sun Oct 08, 2017 11:03 am

DaufuskieNate wrote:
Sun Oct 08, 2017 9:19 am
AlohaJoe wrote:
Sun Oct 08, 2017 9:09 am

It is logically (& mathematically) impossible for Bogle to consider the market fully valued today if he didn't think they were undervalued 12-18 months ago. He gives interviews repeatedly but never in 2016 did he say that markets were undervalued.
Let's test your logic here. If valuations go up, the market must have been under-valued before. So, up until valuations hit their peak, the market must be under-valued. I don't think this is logical at all. Valuations are a relative concept. Stocks can be over-valued relative to their fundamentals and still go higher. Happens all the time.
If they went up and are over-valued then they must have been fully-valued before. Since Bogle said they are now fully-valued after having gone up that does in fact imply that he thought they were under-valued before.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by nedsaid » Sun Oct 08, 2017 11:05 am

I did another round of mild rebalancing last week, rebalancing from stocks into bonds. The stretched valuations of the US Stock Market is a factor that I consider when I decide to harvest gains. I am a bit under 67% stocks now, part of the mild rebalancing process I have been engaged in since July 2013. Another factor is age, I am 58 years old now.

Keep in mind that corporate earnings have been good, interest rates are low, and the economy is showing steady improvement. So the recent strength in the market is not irrational.
A fool and his money are good for business.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by lazyday » Sun Oct 08, 2017 11:11 am

dbr wrote:
Sun Oct 08, 2017 9:34 am
I target a 50% allocation to equities. Can someone advise me by how much I should reduce that in view of current conditions?
This type of thinking makes sense to me:
jhfenton wrote:
Sun Oct 08, 2017 7:30 am
Two years ago, we were 100% equities and always had been. Gradually over the last two years, we've moved to 80/20, partly a reflection of the sudden realization that we're much closer to retirement at 47 than we are to the start of our careers, but also partly a reflection of relative valuations. That's also why we're slightly over 50% international with about half of that in emerging markets. But as Mr. Bogle said, we're not all in or all out of the market, U.S. or otherwise.

Folks may scream market timing, but it's just reality. If the late 2015 to February 2016 swoon had continued, and we were in the middle of a two-year bear market, we'd probably still be 100% equities. And I'd be quite happy about it.
In this video, Bogle never directly advised that we should cut back. But if someone is already thinking about making a change, they might consider his opinion about how expensive the market is and what return we should expect. Today is not an ideal time to increase equity, and it's a better time to cut back than 5 years ago.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by Random Walker » Sun Oct 08, 2017 11:56 am

Magneto wrote:
Have been defensive for some time now and will stay that way for foreseeable future 'to stay our own particular course'.
I totally agree. One should have an IPS and use it as the default. But as one ages and markets give what they will, we get more clear on goals and circumstances change. Internal circumstances include where one is relative to goals and risk tolerance. External circumstances include current valuations and future expected returns. One can make AA changes over time in response to past returns and current valuations to stay on his own particular course with the least amount of risk necessary.

Dave

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by Dottie57 » Sun Oct 08, 2017 12:13 pm

If I were 15-20 years younger I would not touch anything. Let the money ride.

However being 60.5years and retirement (my choice or not) possible at any time, I have moved to a much more conservative stance. My top priority is to preserve funds for use before SS starts.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by HomerJ » Sun Oct 08, 2017 12:37 pm

heartwood wrote:
Sat Oct 07, 2017 10:50 pm
""One thing that I strongly urge: Don't ever, ever, ever if you're an investor think of being out of the market or in the market," Bogle said. Instead, an investor should adjust his or her asset allocation."
Ugh, what happened to stay the course? "Adjusting" one's asset allocation based on what the market is doing is market-timing.

From Boglehead Investing Philosophy
Stay the course
Create an asset allocation that includes bonds to reduce the volatility caused by the stock part of your portfolio, then rebalance when needed. This balanced approach will help you to stay the course. Once you set up a Boglehead portfolio, the only real course correction needed is to rebalance once per year to bring the stock/bond allocations back to pre-set levels. (Investors generally want to increase bond holdings slightly every year, such as by setting the percentage of bonds "to your age in bonds".) Although making only that one change every year takes discipline, it is also an enormous relief to be able to tune out the endless chatter of when and what to buy and sell.
Very disappointed in Jack Bogle.

I guess Bogleheads is only "Investing advice inspired by John Bogle". I can't believe he is making market-timing predictions.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by HomerJ » Sun Oct 08, 2017 12:38 pm

Dottie57 wrote:
Sun Oct 08, 2017 12:13 pm
If I were 15-20 years younger I would not touch anything. Let the money ride.

However being 60.5years and retirement (my choice or not) possible at any time, I have moved to a much more conservative stance. My top priority is to preserve funds for use before SS starts.
One should definitely be more conservative as you get closer to retirement. This is true REGARDLESS of market "valuations".

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by Phineas J. Whoopee » Sun Oct 08, 2017 2:26 pm

What is the external-to-the-market authority whom we all can consult to be told whether market prices are too high, just about right, or too low?

Most potential buyers and sellers disagree with each other over prices most of the time.

PJW

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by Dottie57 » Sun Oct 08, 2017 6:54 pm

HomerJ wrote:
Sun Oct 08, 2017 12:38 pm
Dottie57 wrote:
Sun Oct 08, 2017 12:13 pm
If I were 15-20 years younger I would not touch anything. Let the money ride.

However being 60.5years and retirement (my choice or not) possible at any time, I have moved to a much more conservative stance. My top priority is to preserve funds for use before SS starts.
One should definitely be more conservative as you get closer to retirement. This is true REGARDLESS of market "valuations".
I agree. However discussions in this group have inspired me to look at my asset allocation. Not just market valuations, but also preparing for retirement and evaluating your allcations against the desire for preserving retirement. The conversation

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by tadamsmar » Sun Oct 08, 2017 10:02 pm

dbr wrote:
Sun Oct 08, 2017 9:34 am
I target a 50% allocation to equities. Can someone advise me by how much I should reduce that in view of current conditions? What bond fund should I use for the shift, or maybe CDs?
He says (in the audio) sell back to your allocation before the market increased drastically. But only if you are nervous.

You probably call that "rebalancing", but I don't think Bogle can explicitly recommend the R word without obviously contradicting one of his many many other pronouncements.

If you have been R wording every year then you have already taken profits from US equities anyway

But it depends on what "before the market increased drastically" means.

Vaguely do something!

If he just said something plain like sell 25% of your stock he would not sound like a market guru or a fortune teller.

But if his words have meaning to him then he would be able to tell you the percentage (but he would have to assume you hold the TSM or similar and have not been R wording).

Full disclosure: I sold off 25K yesterday before I read this thread just to make myself feel better. It's a harmless gesture. Sorry Uncle Sam, nothing from taxable.
Last edited by tadamsmar on Thu Oct 12, 2017 9:03 pm, edited 5 times in total.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by whodidntante » Sun Oct 08, 2017 10:25 pm

USA bonds, stocks, and real estate seem "fully valued" to me. I guess that's what happens when central banks print huge volumes of money. The problem is, you have to invest in something.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by tadamsmar » Sun Oct 08, 2017 10:40 pm

If you are feeling like this, sell some stock.


Image

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by acanthurus » Sun Oct 08, 2017 11:26 pm

Removed
Last edited by acanthurus on Tue Oct 31, 2017 6:38 pm, edited 1 time in total.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by steve roy » Mon Oct 09, 2017 12:13 am

Joseph Kennedy was a market timer. He got out of stocks in 1929 because he thought the market was getting a wee bit unhinged.

Warren Buffett is a market timer. He was advising people to buy stocks after the 2008 crash. He wrote a newspaper column about it.

People who take advantage of large market moves aren't necessarily wrong. "Never, ever time the market" is not holy writ inscribed on marble tablets. And what does "timing the market" mean anyway? I've always taken it to mean you shouldn't jump in and out of allocations every time the equity (or bond) markets hiccup.

But a 40%-50% drop? That's something else again. (And it's the only way I've bought personal real estate, at or near market bottoms.)

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by betablocker » Mon Oct 09, 2017 3:42 pm

The evidence on trend following is pretty convincing on average though it doesn't work all the time. That's all market timing. A well diversified person shouldn't attempt market timing according to their own instinct but there's clear historical evidence that certain rules based approaches work. That said, I also would have sold stocks when treasury yields were higher than expected stock returns just like Bogle did in 2000 if I'd been paying attention. Trend signal or no. All rules are made to be broken.

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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by patrick013 » Tue Oct 10, 2017 12:51 pm

I like being reminded that when the market index PE's are over 25
it's a good time to rebalance and pay some taxes capturing gains
to bonds. Even making a 70-30 portfolio a 60-40 portfolio or
a 60-40 portfolio a 50-50 portfolio depending on needs.

I still think his bonds are 50% short term and 50% Intermediate term.
Haven't heard otherwise.
age in bonds, buy-and-hold, 10 year business cycle

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Bogle thinks markets are fully valued

Post by anoop » Tue Oct 10, 2017 9:48 pm

https://www.thestreet.com/amp/story/143 ... bogle.html
"I believe strongly that [investors] should be realizing valuations are fairly full, and if they are nervous they could easily sell off a portion of their stocks.," said Bogle, adding that investors should not sell much.
Market timing?

[merged anoop's topic and its replies into this existing thread - moderator prudent]

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Re: Bogle thinks markets are fully valued

Post by WanderingDoc » Wed Oct 11, 2017 2:46 am

anoop wrote:
Tue Oct 10, 2017 9:48 pm
https://www.thestreet.com/amp/story/143 ... bogle.html
"I believe strongly that [investors] should be realizing valuations are fairly full, and if they are nervous they could easily sell off a portion of their stocks.," said Bogle, adding that investors should not sell much.
Market timing?
Who knows. The thing is, to my knowledge no one has ever gone broke selling a stock or house that has appreciated. :)
One day it suddenly dawned on me that I had won the real estate lottery. | I'm not looking to get rich quickly. I'm not looking to get rich slowly. I'm looking to get rich for sure.

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JoMoney
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Re: Bogle thinks markets are fully valued

Post by JoMoney » Wed Oct 11, 2017 3:02 am

I don't think it's market timing to take money out because you think you're over exposed in stocks and you want to be in a less risky position.
To me, market timing involves selling because you think you'll be able to buy it back later for cheaper.
I think there's a subtle yet distinct difference in the scenarios where
A: one is 90% in stocks and deciding they'd sleep better at 60% in stocks, regardless of what stocks do going forward, they've decided they're happier with that level of risk... compared to
B: someone who is comfortable with the risk of 90% stocks currently but is going to sell down to 60% because they think they'll have the opportunity to back up to 90% at a better price and profit from doing so... whether or not they'll end up better off is unpredictable
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

ryman554
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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by ryman554 » Wed Oct 11, 2017 8:47 am

Phineas J. Whoopee wrote:
Sun Oct 08, 2017 2:26 pm
What is the external-to-the-market authority whom we all can consult to be told whether market prices are too high, just about right, or too low?

Most potential buyers and sellers disagree with each other over prices most of the time.

PJW
I wonder if it is the AI overlords and their high frequency trading computers. Given they can move the market tens of percent due to "algorithm errors", I legitimately wonder how much of the market they really do set.

This comment started intending to be whimsical, but now has me wondering...

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TheTimeLord
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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by TheTimeLord » Wed Oct 11, 2017 9:28 am

heartwood wrote:
Sat Oct 07, 2017 10:50 pm
Fully valued.

https://www.thestreet.com/story/14333626/1/stock-market-is-fully-valued-says-vanguard-s-bogle.html

""One thing that I strongly urge: Don't ever, ever, ever if you're an investor think of being out of the market or in the market," Bogle said. Instead, an investor should adjust his or her asset allocation."

Apologies if already posted.
"I am following John Bogle's advice and ignoring the noise. I will continue to execute my plan" says TheTimeLord 10/11/17.
Run, You Clever Boy!

Lax67
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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by Lax67 » Wed Oct 11, 2017 9:36 am

sambb wrote:
Sun Oct 08, 2017 3:05 am
I dont base my investment decisions on 90+ year old men's thoughts about the market.
That's a really insensitive comment to make. What does being male and 90+ have to do with you learning something?

TJSI
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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by TJSI » Wed Oct 11, 2017 1:28 pm

One thing for sure, that 90 year old man has accumulated a lot of knowledge and wisdom. And I think it is great that he is so willing to share it.

TJSI

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tadamsmar
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Re: Bogle thinks markets are fully valued

Post by tadamsmar » Thu Oct 12, 2017 9:24 pm

anoop wrote:
Tue Oct 10, 2017 9:48 pm
https://www.thestreet.com/amp/story/143 ... bogle.html
"I believe strongly that [investors] should be realizing valuations are fairly full, and if they are nervous they could easily sell off a portion of their stocks.," said Bogle, adding that investors should not sell much.
Market timing?
Rebalancing?

In the audio, he says to bring your balance back to where it was before the market rose drastically.

But if your policy is to rebalance then you have been taking profits from US stocks for the last eight years.

Note that Bogle's advice had been to not rebalance.

If you have not been taking Bogle's advice on rebalancing for the last eight years, do you need to take his advice now about bringing your balance back to its level at some earlier vaguely defined point in time?

But if you have never rebalanced then maybe you should take his advice.

anoop
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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by anoop » Thu Oct 12, 2017 9:36 pm

^ good point regarding rebalancing. But if that is what he meant he should have been more explicit.

In my case I have been out of stocks since 2008, so this year I am expecting more than double the returns of last year and I expect that to rise even more next year, albeit not keeping up with inflation!

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