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

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

Post by lostdog » Thu Oct 12, 2017 9:37 pm

Noise.
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hightower
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Re: Bogle thinks markets are fully valued

Post by hightower » Thu Oct 12, 2017 9:40 pm

JoMoney wrote:
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
Not buying it. No matter what the reason, pulling money out of the market when the market is up is timing the market. In scenario A the only reason one would sleep better at 60% is because they know they'd lose less in a crash (and hence be able to buy more at that time as well). In B they're just being honest with themselves. In the end the result is the same. They're hoping to preserve cash so that they have more buying power in the future (whether it's stocks or living expenses).
I have no shame in stating that my current strategy is to keep more cash on hand and pay off debt instead of buying more shares. We're still fully funding our 401k's, but we're not buying shares in our taxable account at the moment. I'm just going to build up some cash reserves and wait. I'm paying down the rest of my low interest student loan debt instead because I believe when the next crash comes being debt free will allow me more buying power.

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JoMoney
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Re: Bogle thinks markets are fully valued

Post by JoMoney » Fri Oct 13, 2017 12:04 am

hightower wrote:
Thu Oct 12, 2017 9:40 pm
JoMoney wrote:
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
Not buying it. No matter what the reason, pulling money out of the market when the market is up is timing the market. In scenario A the only reason one would sleep better at 60% is because they know they'd lose less in a crash (and hence be able to buy more at that time as well). In B they're just being honest with themselves. In the end the result is the same. They're hoping to preserve cash so that they have more buying power in the future (whether it's stocks or living expenses).
I have no shame in stating that my current strategy is to keep more cash on hand and pay off debt instead of buying more shares. We're still fully funding our 401k's, but we're not buying shares in our taxable account at the moment. I'm just going to build up some cash reserves and wait. I'm paying down the rest of my low interest student loan debt instead because I believe when the next crash comes being debt free will allow me more buying power.
In your world, if you take money out of the market to buy a house or lunch or whatever without the intent to put it back in the market, is that 'market timing' ?
You can have your own opinion on it, and "Market timing" isn't a sin, just a bad strategy that a lot of people try (and most fail).
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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

Post by tadamsmar » Fri Oct 13, 2017 11:03 am

anoop wrote:
Thu Oct 12, 2017 9:36 pm
^ good point regarding rebalancing. But if that is what he meant he should have been more explicit.
What we call "rebalancing" is based on time (for instance, once a year) or a percentage-of-equities trigger point.

He seems to be using a PE trigger point and the process is vague.

But the goal is the similar: a reduction of risk and getting back to some prior norm.

dbr
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Re: Bogle thinks markets are fully valued

Post by dbr » Fri Oct 13, 2017 11:21 am

tadamsmar wrote:
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.
Right This is a good illustration of how convoluted it becomes to try to listen to Bogle soundbites and actually turn that into something actionable.

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

Post by WhiteMaxima » Fri Oct 13, 2017 12:01 pm

I already moved 50% into stable value fund. Would rather forgo 10% gain than -20% loss.

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tadamsmar
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Re: Bogle thinks markets are fully valued

Post by tadamsmar » Sat Oct 14, 2017 3:05 am

dbr wrote:
Fri Oct 13, 2017 11:21 am
tadamsmar wrote:
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.
Right This is a good illustration of how convoluted it becomes to try to listen to Bogle soundbites and actually turn that into something actionable.
Ironically, Bogleheads don't seem to be all that good at getting inside Bogle's head.

You have to look at investing from the prospective of a guy who never rebalances and never buys international. Yet he feels a need for some form of risk reduction. But his nervousness should not necessarily infect the habitual rebalancer. The fact that a guy who never rebalances need to do something does not mean that you need to adjust the stock allocation that you have been regularly rebalancing to.

It would be interesting to know what percentage of Bogleheads never rebalance and never buy international.

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Re: Bogle thinks markets are fully valued

Post by ByThePond » Sat Oct 14, 2017 9:45 am

I have rebalanced once in the last 20 years, going from 100% to 65% equities, and this at age 62. Very stable job, etc. It's been a nice ride up.

0% international, for the usual reasons.

tadamsmar wrote:
Sat Oct 14, 2017 3:05 am


It would be interesting to know what percentage of Bogleheads never rebalance and never buy international.

dbr
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Re: Bogle thinks markets are fully valued

Post by dbr » Sat Oct 14, 2017 9:57 am

ByThePond wrote:
Sat Oct 14, 2017 9:45 am
I have rebalanced once in the last 20 years, going from 100% to 65% equities, and this at age 62. Very stable job, etc. It's been a nice ride up.

0% international, for the usual reasons.

tadamsmar wrote:
Sat Oct 14, 2017 3:05 am


It would be interesting to know what percentage of Bogleheads never rebalance and never buy international.
That was reallocating, not rebalancing. Lots of Bogleheads reallocate when their situation dictates a different asset allocation. The Bogle age-in-bonds rule is a rule to reallocate continuously with age. Mr. Bogle has seemingly also made comments to the effect that one should follow age in bonds and also not follow it as it is unclear if he has said to not rebalance or if he has said to not reallocate. What the comments that are the topic of this thread are really supposed to be taken to mean I have no idea.

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Re: Bogle thinks markets are fully valued

Post by ByThePond » Sat Oct 14, 2017 4:25 pm

dbr wrote:
Sat Oct 14, 2017 9:57 am


That was reallocating, not rebalancing. ............ What the comments that are the topic of this thread are really supposed to be taken to mean I have no idea.
Of course, you're right. Remind me not to post comments before the coffee kicks in.

I also have trouble figuring out this discussion. It seems to me that the over/proper/under valuation of the market arguments here can't logically be extrapolated to the past, because conditions have changed. Shouldn't we expect the underlying value of issues to vary over time? And doesn't this affect the relative proper market valuation? Or am I viewing this too simply?

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

Post by anoop » Sat Oct 14, 2017 4:47 pm

This is one that of the most comprehensive articles that I have seen on market valuation.
https://www.advisorperspectives.com/dsh ... overvalued

It covers market valuation using several methods and also discusses the issue of low interest rates.
Last edited by anoop on Sat Oct 14, 2017 6:12 pm, edited 1 time in total.

2pedals
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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by 2pedals » Sat Oct 14, 2017 6:05 pm

So what is it or isn't. Jack Bogle suggested to make moderate adjustments to your asset allocations. It's the same advice if it was or wasn't fully valued.

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

Post by tadamsmar » Sun Oct 15, 2017 8:16 pm

2pedals wrote:
Sat Oct 14, 2017 6:05 pm
So what is it or isn't. Jack Bogle suggested to make moderate adjustments to your asset allocations. It's the same advice if it was or wasn't fully valued.
For me, adjusting my asset allocation would involve adjusting my target for rebalancing.

But Bogle is against rebalancing, so there is no target in his approach.

I don't think he is suggesting a moderate adjustment to a non-existent target,

What do you think "asset allocation" means?

2pedals
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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by 2pedals » Sun Oct 15, 2017 9:49 pm

tadamsmar wrote:
Sun Oct 15, 2017 8:16 pm
2pedals wrote:
Sat Oct 14, 2017 6:05 pm
So what is it or isn't. Jack Bogle suggested to make moderate adjustments to your asset allocations. It's the same advice if it was or wasn't fully valued.
For me, adjusting my asset allocation would involve adjusting my target for rebalancing.

But Bogle is against rebalancing, so there is no target in his approach.

I don't think he is suggesting a moderate adjustment to a non-existent target,

What do you think "asset allocation" means?
I suppose this is a warning to those who have not adjusted their asset allocation. A suggestion to review your asset allocation for those who have not done so and slowly balancing to an adjusted allocation based on age and/or your stage in life, i.e. are your nearing retirement and have 80/20 stock/bonds at age 60 and plan on retiring shortly. This could a warning to rethink such asset allocation to something like 50/50 or 40/60 and slowly balance to that allocation. I think you should have been slowly doing that anyway and using age in bonds as a guide, so I don't think this changes anything for me.

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

Post by JBTX » Sun Oct 15, 2017 10:22 pm

My take is Bogle is a pragmatist. That is in conflict with some Bogleheads are who more dogmatic with his principles.

Bogle is against market timing, and jumping in and out of the market for pragmatic reasons. Because most can't predict the market. Bogle is for indexing vs active management for pragmatic reasons, the evidence shows and logic dictates indexing is usually going to beat active management. However, he isn't blind, and he isn't dumb, and has stated on numerous occasions he thinks market returns will be low over the next decade - presumably because of their historically higher valuations. If people are spooked by this, then it doesn't seem unreasonable to tweak their allocations to something they are more comfortable with. That isn't exactly the same thing as market timing. There are a range of "accepted" asset allocations. Over the last 15 -20 years I have gone from the more aggressive side of those allocations (120-age in stocks, for instance) to a more conservative position (100-age in equities). People have to have an allocation they are comfortable with, otherwise they won't stick with it.

I guess when you get to a certain level of popularity people cling to every word. It certainly happened to Greenspan. And also apparently now Bogle. I would interpret "fully valued" meaning they certainly aren't undervalued, and perhaps somewhat overvalued. Or more importantly, they are definitely on the high end of historical valuations (which is different than "overvalued"). Trying to logically surmise that he thought they were undervalued 2 years ago is reading too much into his statements and ignoring the context of what he was saying.

Recently I had quoted an article that said that Bogle said that after a certain point indexing may have a material impact on the total market. In actuality (as pointed out by another poster here) what he said was he didn't think it would have a material impact, and when pushed to throw out a percent of the market where it might, he threw out, maybe XX% (don't recall the number). Again trying to interpret the literal words (or the logical inverse of the literal words) vs the context of what he was saying. Same with him saying "he was right" about international given they had under-performed over a long period of time. I suspect there was a bit of tongue in cheek with that.

WanderingDoc
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Re: Bogle thinks markets are fully valued

Post by WanderingDoc » Sun Oct 15, 2017 11:50 pm

JoMoney wrote:
Fri Oct 13, 2017 12:04 am
hightower wrote:
Thu Oct 12, 2017 9:40 pm
JoMoney wrote:
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
Not buying it. No matter what the reason, pulling money out of the market when the market is up is timing the market. In scenario A the only reason one would sleep better at 60% is because they know they'd lose less in a crash (and hence be able to buy more at that time as well). In B they're just being honest with themselves. In the end the result is the same. They're hoping to preserve cash so that they have more buying power in the future (whether it's stocks or living expenses).
I have no shame in stating that my current strategy is to keep more cash on hand and pay off debt instead of buying more shares. We're still fully funding our 401k's, but we're not buying shares in our taxable account at the moment. I'm just going to build up some cash reserves and wait. I'm paying down the rest of my low interest student loan debt instead because I believe when the next crash comes being debt free will allow me more buying power.
In your world, if you take money out of the market to buy a house or lunch or whatever without the intent to put it back in the market, is that 'market timing' ?
You can have your own opinion on it, and "Market timing" isn't a sin, just a bad strategy that a lot of people try (and most fail).
Very simple solution arguments about market timing, definitions, and having the ability to buy a house, go to a steakhouse, or take a spontaneous vacation:

Buy income-producing real estate. Best of both worlds. Great retirement plan when rentals are payed off in 20-30 years, fantastic for taxes, and gives you discretionary income NOW to spend on food, charity, or personal homes and indulgence.

Sounds like a decent antidote to nervously debating on the next market crash, whether this or that is market timing, is this money trapped until I am 65? Do I have to LBYM and keep working for another 30 years? etc.
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.

avalpert
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Re: Bogle thinks markets are fully valued

Post by avalpert » Sun Oct 15, 2017 11:54 pm

WanderingDoc wrote:
Sun Oct 15, 2017 11:50 pm
JoMoney wrote:
Fri Oct 13, 2017 12:04 am
hightower wrote:
Thu Oct 12, 2017 9:40 pm
JoMoney wrote:
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
Not buying it. No matter what the reason, pulling money out of the market when the market is up is timing the market. In scenario A the only reason one would sleep better at 60% is because they know they'd lose less in a crash (and hence be able to buy more at that time as well). In B they're just being honest with themselves. In the end the result is the same. They're hoping to preserve cash so that they have more buying power in the future (whether it's stocks or living expenses).
I have no shame in stating that my current strategy is to keep more cash on hand and pay off debt instead of buying more shares. We're still fully funding our 401k's, but we're not buying shares in our taxable account at the moment. I'm just going to build up some cash reserves and wait. I'm paying down the rest of my low interest student loan debt instead because I believe when the next crash comes being debt free will allow me more buying power.
In your world, if you take money out of the market to buy a house or lunch or whatever without the intent to put it back in the market, is that 'market timing' ?
You can have your own opinion on it, and "Market timing" isn't a sin, just a bad strategy that a lot of people try (and most fail).
Very simple solution arguments about market timing, definitions, and having the ability to buy a house, go to a steakhouse, or take a spontaneous vacation:

Buy income-producing real estate. Best of both worlds. Great retirement plan when rentals are payed off in 20-30 years, fantastic for taxes, and gives you discretionary income NOW to spend on food, charity, or personal homes and indulgence.

Sounds like a decent antidote to nervously debating on the next market crash, whether this or that is market timing, is this money trapped until I am 65? Do I have to LBYM and keep working for another 30 years? etc.
Geeze, where can I buy your books and attend your seminar on the wonders of incoming-producing real estate...

WanderingDoc
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Re: Bogle thinks markets are fully valued

Post by WanderingDoc » Sun Oct 15, 2017 11:58 pm

avalpert wrote:
Sun Oct 15, 2017 11:54 pm
WanderingDoc wrote:
Sun Oct 15, 2017 11:50 pm
JoMoney wrote:
Fri Oct 13, 2017 12:04 am
hightower wrote:
Thu Oct 12, 2017 9:40 pm
JoMoney wrote:
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
Not buying it. No matter what the reason, pulling money out of the market when the market is up is timing the market. In scenario A the only reason one would sleep better at 60% is because they know they'd lose less in a crash (and hence be able to buy more at that time as well). In B they're just being honest with themselves. In the end the result is the same. They're hoping to preserve cash so that they have more buying power in the future (whether it's stocks or living expenses).
I have no shame in stating that my current strategy is to keep more cash on hand and pay off debt instead of buying more shares. We're still fully funding our 401k's, but we're not buying shares in our taxable account at the moment. I'm just going to build up some cash reserves and wait. I'm paying down the rest of my low interest student loan debt instead because I believe when the next crash comes being debt free will allow me more buying power.
In your world, if you take money out of the market to buy a house or lunch or whatever without the intent to put it back in the market, is that 'market timing' ?
You can have your own opinion on it, and "Market timing" isn't a sin, just a bad strategy that a lot of people try (and most fail).
Very simple solution arguments about market timing, definitions, and having the ability to buy a house, go to a steakhouse, or take a spontaneous vacation:

Buy income-producing real estate. Best of both worlds. Great retirement plan when rentals are payed off in 20-30 years, fantastic for taxes, and gives you discretionary income NOW to spend on food, charity, or personal homes and indulgence.

Sounds like a decent antidote to nervously debating on the next market crash, whether this or that is market timing, is this money trapped until I am 65? Do I have to LBYM and keep working for another 30 years? etc.
Geeze, where can I buy your books and attend your seminar on the wonders of incoming-producing real estate...
The time will come, grasshopper. For there is still so much to do.

I have to say the way you describe it as "wonders" is highly accurate as I am beginning to learn more.
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.

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

Post by Bastiat » Mon Oct 16, 2017 12:03 am

lazyday wrote:
Sun Oct 08, 2017 11:11 am
Today is not an ideal time to increase equity, and it's a better time to cut back than 5 years ago.
Unless you have a crystal ball, you cannot make that claim.

avalpert
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Re: Bogle thinks markets are fully valued

Post by avalpert » Mon Oct 16, 2017 12:04 am

WanderingDoc wrote:
Sun Oct 15, 2017 11:58 pm
avalpert wrote:
Sun Oct 15, 2017 11:54 pm
WanderingDoc wrote:
Sun Oct 15, 2017 11:50 pm
JoMoney wrote:
Fri Oct 13, 2017 12:04 am
hightower wrote:
Thu Oct 12, 2017 9:40 pm


Not buying it. No matter what the reason, pulling money out of the market when the market is up is timing the market. In scenario A the only reason one would sleep better at 60% is because they know they'd lose less in a crash (and hence be able to buy more at that time as well). In B they're just being honest with themselves. In the end the result is the same. They're hoping to preserve cash so that they have more buying power in the future (whether it's stocks or living expenses).
I have no shame in stating that my current strategy is to keep more cash on hand and pay off debt instead of buying more shares. We're still fully funding our 401k's, but we're not buying shares in our taxable account at the moment. I'm just going to build up some cash reserves and wait. I'm paying down the rest of my low interest student loan debt instead because I believe when the next crash comes being debt free will allow me more buying power.
In your world, if you take money out of the market to buy a house or lunch or whatever without the intent to put it back in the market, is that 'market timing' ?
You can have your own opinion on it, and "Market timing" isn't a sin, just a bad strategy that a lot of people try (and most fail).
Very simple solution arguments about market timing, definitions, and having the ability to buy a house, go to a steakhouse, or take a spontaneous vacation:

Buy income-producing real estate. Best of both worlds. Great retirement plan when rentals are payed off in 20-30 years, fantastic for taxes, and gives you discretionary income NOW to spend on food, charity, or personal homes and indulgence.

Sounds like a decent antidote to nervously debating on the next market crash, whether this or that is market timing, is this money trapped until I am 65? Do I have to LBYM and keep working for another 30 years? etc.
Geeze, where can I buy your books and attend your seminar on the wonders of incoming-producing real estate...
The time will come, grasshopper. For there is still so much to do.

I have to say the way you describe it as "wonders" is highly accurate as I am beginning to learn more.
This is so 90's infomercial - I think I'll just make my fortune in Showtime Rotisserie Grills...

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

Post by Bastiat » Mon Oct 16, 2017 12:11 am

steve roy wrote:
Mon Oct 09, 2017 12:13 am
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.)
How did you know you'd arrived at the market bottom? Was it printed in the Newspaper?

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JoMoney
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Re: Bogle thinks markets are fully valued

Post by JoMoney » Mon Oct 16, 2017 1:32 am

avalpert wrote:
Mon Oct 16, 2017 12:04 am
...
This is so 90's infomercial - I think I'll just make my fortune in Showtime Rotisserie Grills...
Worse than infomercial, CNBC used to have a show "The Millionaire Inside", I vividly remember in 2007 Barbara Corcoran (now famous for Shark Tank) being on the show bragging about having real estate leveraged to the hilt and spending on HELOCs and how it just keeps going up and up and everyone should go out and get property... pretty bad timing on that one.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

WanderingDoc
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Re: Bogle thinks markets are fully valued

Post by WanderingDoc » Mon Oct 16, 2017 1:53 am

JoMoney wrote:
Mon Oct 16, 2017 1:32 am
avalpert wrote:
Mon Oct 16, 2017 12:04 am
...
This is so 90's infomercial - I think I'll just make my fortune in Showtime Rotisserie Grills...
Worse than infomercial, CNBC used to have a show "The Millionaire Inside", I vividly remember in 2007 Barbara Corcoran (now famous for Shark Tank) being on the show bragging about having real estate leveraged to the hilt and spending on HELOCs and how it just keeps going up and up and everyone should go out and get property... pretty bad timing on that one.
And yet, the results speak for themselves. She is STILL worth $100s of MMs and is one of the "Sharks" on Shark Tank. I know who I'll be calling for advice 8-)
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.

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

Post by lazyday » Mon Oct 16, 2017 5:14 am

Bastiat wrote:
Mon Oct 16, 2017 12:03 am
lazyday wrote:
Sun Oct 08, 2017 11:11 am
Today is not an ideal time to increase equity, and it's a better time to cut back than 5 years ago.
Unless you have a crystal ball, you cannot make that claim.
But I have a crystal ball into the past!

For example, it would have been more ideal to increase equity April 2009 than to do it today. In both cases, you will get the future return, but in the former case you also get the appreciation since 09.

I can't say that today is a good time to cut back, but looking backwards, it does seem to be a better time than most. (for those already thinking about a change; I wasn't suggesting gross market timing)

avalpert
Posts: 6313
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Re: Bogle thinks markets are fully valued

Post by avalpert » Mon Oct 16, 2017 8:33 am

WanderingDoc wrote:
Mon Oct 16, 2017 1:53 am
JoMoney wrote:
Mon Oct 16, 2017 1:32 am
avalpert wrote:
Mon Oct 16, 2017 12:04 am
...
This is so 90's infomercial - I think I'll just make my fortune in Showtime Rotisserie Grills...
Worse than infomercial, CNBC used to have a show "The Millionaire Inside", I vividly remember in 2007 Barbara Corcoran (now famous for Shark Tank) being on the show bragging about having real estate leveraged to the hilt and spending on HELOCs and how it just keeps going up and up and everyone should go out and get property... pretty bad timing on that one.
And yet, the results speak for themselves. She is STILL worth $100s of MMs and is one of the "Sharks" on Shark Tank. I know who I'll be calling for advice 8-)
Yes, if you want to learn how to turn being a real estate investor into becoming a TV personality she is definitely a good one to call - but at least you acknowledge it is is the infomercial route you are going for.

And for what it is worth, her net worth is decidedly under $100 million and the biggest driver of its recent increases has been... reality TV stardom...

WanderingDoc
Posts: 347
Joined: Sat Aug 05, 2017 8:21 pm

Re: Bogle thinks markets are fully valued

Post by WanderingDoc » Mon Oct 16, 2017 1:55 pm

avalpert wrote:
Mon Oct 16, 2017 8:33 am
WanderingDoc wrote:
Mon Oct 16, 2017 1:53 am
JoMoney wrote:
Mon Oct 16, 2017 1:32 am
avalpert wrote:
Mon Oct 16, 2017 12:04 am
...
This is so 90's infomercial - I think I'll just make my fortune in Showtime Rotisserie Grills...
Worse than infomercial, CNBC used to have a show "The Millionaire Inside", I vividly remember in 2007 Barbara Corcoran (now famous for Shark Tank) being on the show bragging about having real estate leveraged to the hilt and spending on HELOCs and how it just keeps going up and up and everyone should go out and get property... pretty bad timing on that one.
And yet, the results speak for themselves. She is STILL worth $100s of MMs and is one of the "Sharks" on Shark Tank. I know who I'll be calling for advice 8-)
Yes, if you want to learn how to turn being a real estate investor into becoming a TV personality she is definitely a good one to call - but at least you acknowledge it is is the infomercial route you are going for.

And for what it is worth, her net worth is decidedly under $100 million and the biggest driver of its recent increases has been... reality TV stardom...
https://www.celebritynetworth.com/riche ... net-worth/
Okay, $80M. Not half bad starting from a $1000 investment.

I guess what stock market investors cannot seems to comprehend is that whether or not the real estate market is up or down, we still make money. Every single month. With stocks and mutual funds this of course isn't the case.

This is probably a good thing. I would rather have the masses believe into the hype and think stocks and RE are one and the same in down times. This just leaves more deals for me :) :sharebeer
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.

avalpert
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Re: Bogle thinks markets are fully valued

Post by avalpert » Mon Oct 16, 2017 2:01 pm

WanderingDoc wrote:
Mon Oct 16, 2017 1:55 pm
avalpert wrote:
Mon Oct 16, 2017 8:33 am
WanderingDoc wrote:
Mon Oct 16, 2017 1:53 am
JoMoney wrote:
Mon Oct 16, 2017 1:32 am
avalpert wrote:
Mon Oct 16, 2017 12:04 am
...
This is so 90's infomercial - I think I'll just make my fortune in Showtime Rotisserie Grills...
Worse than infomercial, CNBC used to have a show "The Millionaire Inside", I vividly remember in 2007 Barbara Corcoran (now famous for Shark Tank) being on the show bragging about having real estate leveraged to the hilt and spending on HELOCs and how it just keeps going up and up and everyone should go out and get property... pretty bad timing on that one.
And yet, the results speak for themselves. She is STILL worth $100s of MMs and is one of the "Sharks" on Shark Tank. I know who I'll be calling for advice 8-)
Yes, if you want to learn how to turn being a real estate investor into becoming a TV personality she is definitely a good one to call - but at least you acknowledge it is is the infomercial route you are going for.

And for what it is worth, her net worth is decidedly under $100 million and the biggest driver of its recent increases has been... reality TV stardom...
https://www.celebritynetworth.com/riche ... net-worth/
Okay, $80M. Not half bad starting from a $1000 investment.

I guess what stock market investors cannot seems to comprehend is that whether or not the real estate market is up or down, we still make money. Every single month. With stocks and mutual funds this of course isn't the case.
It is exactly as much the case - you are making the same mental error that dividend-chasers make when they confuse the income they take out of the business with net-returns.
This is probably a good thing. I would rather have the masses believe into the hype and think stocks and RE are one and the same in down times. This just leaves more deals for me :) :sharebeer
Sure it does...

WanderingDoc
Posts: 347
Joined: Sat Aug 05, 2017 8:21 pm

Re: Bogle thinks markets are fully valued

Post by WanderingDoc » Mon Oct 16, 2017 2:25 pm

avalpert wrote:
Mon Oct 16, 2017 2:01 pm
WanderingDoc wrote:
Mon Oct 16, 2017 1:55 pm
avalpert wrote:
Mon Oct 16, 2017 8:33 am
WanderingDoc wrote:
Mon Oct 16, 2017 1:53 am
JoMoney wrote:
Mon Oct 16, 2017 1:32 am

Worse than infomercial, CNBC used to have a show "The Millionaire Inside", I vividly remember in 2007 Barbara Corcoran (now famous for Shark Tank) being on the show bragging about having real estate leveraged to the hilt and spending on HELOCs and how it just keeps going up and up and everyone should go out and get property... pretty bad timing on that one.
And yet, the results speak for themselves. She is STILL worth $100s of MMs and is one of the "Sharks" on Shark Tank. I know who I'll be calling for advice 8-)
Yes, if you want to learn how to turn being a real estate investor into becoming a TV personality she is definitely a good one to call - but at least you acknowledge it is is the infomercial route you are going for.

And for what it is worth, her net worth is decidedly under $100 million and the biggest driver of its recent increases has been... reality TV stardom...
https://www.celebritynetworth.com/riche ... net-worth/
Okay, $80M. Not half bad starting from a $1000 investment.

I guess what stock market investors cannot seems to comprehend is that whether or not the real estate market is up or down, we still make money. Every single month. With stocks and mutual funds this of course isn't the case.
It is exactly as much the case - you are making the same mental error that dividend-chasers make when they confuse the income they take out of the business with net-returns.
This is probably a good thing. I would rather have the masses believe into the hype and think stocks and RE are one and the same in down times. This just leaves more deals for me :) :sharebeer
Sure it does...
You're just wrong.

Dividends payed by stocks and mutual funds are a joke. 1.5% or 2%. Also, they are often stuck in a retirement account. Also, they are taxed at ordinary or capital gains rates.

For me, dividends from real estate are 10-15% or I won't even look at the deal. They are not stuck in a retirement account - they go right into my checking account. I can use them to go the movies and eat popcorn. Also, I don't pay any tax on dividend income from leveraged real estate.

Again, try to equate two different investment classes to justify the inflexible and inferior investment as "oh they are the same". They couldn't be any more different. You bring up infomercial this, Shark tank that, instead of looking at the facts. You are good at streering the subject from the actual crux of the matter.
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.

avalpert
Posts: 6313
Joined: Sat Mar 22, 2008 4:58 pm

Re: Bogle thinks markets are fully valued

Post by avalpert » Mon Oct 16, 2017 3:06 pm

WanderingDoc wrote:
Mon Oct 16, 2017 2:25 pm
avalpert wrote:
Mon Oct 16, 2017 2:01 pm
WanderingDoc wrote:
Mon Oct 16, 2017 1:55 pm
avalpert wrote:
Mon Oct 16, 2017 8:33 am
WanderingDoc wrote:
Mon Oct 16, 2017 1:53 am


And yet, the results speak for themselves. She is STILL worth $100s of MMs and is one of the "Sharks" on Shark Tank. I know who I'll be calling for advice 8-)
Yes, if you want to learn how to turn being a real estate investor into becoming a TV personality she is definitely a good one to call - but at least you acknowledge it is is the infomercial route you are going for.

And for what it is worth, her net worth is decidedly under $100 million and the biggest driver of its recent increases has been... reality TV stardom...
https://www.celebritynetworth.com/riche ... net-worth/
Okay, $80M. Not half bad starting from a $1000 investment.

I guess what stock market investors cannot seems to comprehend is that whether or not the real estate market is up or down, we still make money. Every single month. With stocks and mutual funds this of course isn't the case.
It is exactly as much the case - you are making the same mental error that dividend-chasers make when they confuse the income they take out of the business with net-returns.
This is probably a good thing. I would rather have the masses believe into the hype and think stocks and RE are one and the same in down times. This just leaves more deals for me :) :sharebeer
Sure it does...
You're just wrong.

Dividends payed by stocks and mutual funds are a joke. 1.5% or 2%. Also, they are often stuck in a retirement account. Also, they are taxed at ordinary or capital gains rates.

For me, dividends from real estate are 10-15% or I won't even look at the deal. They are not stuck in a retirement account - they go right into my checking account. I can use them to go the movies and eat popcorn. Also, I don't pay any tax on dividend income from leveraged real estate.
Sorry, not wrong and you completely missed the point. Extracting the cash flow earnings from your investment doesn't make up for any asset valuation losses - you are confusing the businesses cash-flow with total returns (just like the dividend chasers).
Again, try to equate two different investment classes to justify the inflexible and inferior investment as "oh they are the same".
Ha, you are joking right? One of us accepts that there are a myriad of investments out there that can help one achieve their goals - one of us think they have found a magic key that it the only true way. There is someone here who is demonstrating inflexibility and a lack of understanding facts - here's a hint, it isn't me.

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patrick013
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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by patrick013 » Mon Oct 16, 2017 3:07 pm

JBTX wrote:
Sun Oct 15, 2017 10:22 pm
Bogle is for indexing vs active management for pragmatic reasons, the evidence shows and logic dictates indexing is usually going to beat active management. However, he isn't blind, and he isn't dumb, and has stated on numerous occasions he thinks market returns will be low over the next decade - presumably because of their historically higher valuations.
Read an article this morning which asserts the Dow at 23 is a surety and the Dow
at 24 is another short term certainty. If any market decline occurs it will not be
in the Dow index they say.

500 earnings seems set to go over 120 next year and higher so the 500 over 3000
people should be dancing too.

Time will tell. Might be marketing bias so prevalent in journalism.
age in bonds, buy-and-hold, 10 year business cycle

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

Post by JBTX » Mon Oct 16, 2017 4:16 pm

patrick013 wrote:
Mon Oct 16, 2017 3:07 pm
JBTX wrote:
Sun Oct 15, 2017 10:22 pm
Bogle is for indexing vs active management for pragmatic reasons, the evidence shows and logic dictates indexing is usually going to beat active management. However, he isn't blind, and he isn't dumb, and has stated on numerous occasions he thinks market returns will be low over the next decade - presumably because of their historically higher valuations.
Read an article this morning which asserts the Dow at 23 is a surety and the Dow
at 24 is another short term certainty. If any market decline occurs it will not be
in the Dow index they say.

500 earnings seems set to go over 120 next year and higher so the 500 over 3000
people should be dancing too.

Time will tell. Might be marketing bias so prevalent in journalism.
I doubt it is going to come crashing back down any time soon, unless there is some sort of international or domestic or economic unexpected "shock", which is entirely plausible (some would argue inevitable). As long as the economy stays reasonably good, earnings solid, inflation low, and interest rates low I expect valuations will stay where they are, plus or minus a bit. Interest rates could increase a little bit and probably wouldn't spoil the party. However, after a certain point if they increased quite a bit that could bring about a big downturn.

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

Post by WhiteMaxima » Mon Oct 16, 2017 5:38 pm

If crush will come, it will come at quick for no reason. What does full value mean? I do think it' god time to take some profit now.

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

Post by tadamsmar » Mon Oct 16, 2017 8:05 pm

2pedals wrote:
Sun Oct 15, 2017 9:49 pm
tadamsmar wrote:
Sun Oct 15, 2017 8:16 pm
2pedals wrote:
Sat Oct 14, 2017 6:05 pm
So what is it or isn't. Jack Bogle suggested to make moderate adjustments to your asset allocations. It's the same advice if it was or wasn't fully valued.
For me, adjusting my asset allocation would involve adjusting my target for rebalancing.

But Bogle is against rebalancing, so there is no target in his approach.

I don't think he is suggesting a moderate adjustment to a non-existent target,

What do you think "asset allocation" means?
I suppose this is a warning to those who have not adjusted their asset allocation. A suggestion to review your asset allocation for those who have not done so and slowly balancing to an adjusted allocation based on age and/or your stage in life, i.e. are your nearing retirement and have 80/20 stock/bonds at age 60 and plan on retiring shortly. This could a warning to rethink such asset allocation to something like 50/50 or 40/60 and slowly balance to that allocation. I think you should have been slowly doing that anyway and using age in bonds as a guide, so I don't think this changes anything for me.
I think you are treating Bogle's words like a Rorschach test.

What he actually said was to bring your balance back to where it was before stocks increased drastically if you are nervous.

Balance could mean your absolute holding, not a precentage asset allocation. He does not believe in rebalancing, so he does not have a target asset allocation.

He did not say to do anything slowly. He just said to sell some stock now if you are nervous

He made "fully valued" sound ominous, but doesn't that just mean that the price is right? No hurt in selling or holding if the price is right, right?

How can reducing your asset allocation based on on a higher PE be consistent with the notion that asset allocation = age in bonds? Do we really get younger as the PE goes higher?

2pedals
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Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Post by 2pedals » Mon Oct 16, 2017 10:20 pm

tadamsmar wrote:
Mon Oct 16, 2017 8:05 pm

I think you are treating Bogle's words like a Rorschach test.

What he actually said was to bring your balance back to where it was before stocks increased drastically if you are nervous.

Balance could mean your absolute holding, not a precentage asset allocation. He does not believe in rebalancing, so he does not have a target asset allocation.

He did not say to do anything slowly. He just said to sell some stock now if you are nervous

He made "fully valued" sound ominous, but doesn't that just mean that the price is right? No hurt in selling or holding if the price is right, right?

How can reducing your asset allocation based on on a higher PE be consistent with the notion that asset allocation = age in bonds? Do we really get younger as the PE goes higher?

He clearly said at the end of the clip said "The one thing I would strongly urge is don't ever, ever, ever if you're an investor think of being out of the market or in the market. It a very different piece of cake than making moderate adjustments to to your asset allocations."

I don't get your position that he does not believe in an asset allocation since he refers to it at the very end of the clip. I must be missing something when you say he does not have a target asset allocation. Some of the articles I have read say that he had a 60/40 allocation and now has a 50/50 asset allocation. He has also said that own your age in bonds is a good starting point.

http://www.npr.org/2015/10/17/436993646 ... lios#bogle

JBTX
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Re: Bogle thinks markets are fully valued

Post by JBTX » Tue Oct 17, 2017 12:12 am

WanderingDoc wrote:
Sun Oct 15, 2017 11:58 pm
avalpert wrote:
Sun Oct 15, 2017 11:54 pm
WanderingDoc wrote:
Sun Oct 15, 2017 11:50 pm
JoMoney wrote:
Fri Oct 13, 2017 12:04 am
hightower wrote:
Thu Oct 12, 2017 9:40 pm


Not buying it. No matter what the reason, pulling money out of the market when the market is up is timing the market. In scenario A the only reason one would sleep better at 60% is because they know they'd lose less in a crash (and hence be able to buy more at that time as well). In B they're just being honest with themselves. In the end the result is the same. They're hoping to preserve cash so that they have more buying power in the future (whether it's stocks or living expenses).
I have no shame in stating that my current strategy is to keep more cash on hand and pay off debt instead of buying more shares. We're still fully funding our 401k's, but we're not buying shares in our taxable account at the moment. I'm just going to build up some cash reserves and wait. I'm paying down the rest of my low interest student loan debt instead because I believe when the next crash comes being debt free will allow me more buying power.
In your world, if you take money out of the market to buy a house or lunch or whatever without the intent to put it back in the market, is that 'market timing' ?
You can have your own opinion on it, and "Market timing" isn't a sin, just a bad strategy that a lot of people try (and most fail).
Very simple solution arguments about market timing, definitions, and having the ability to buy a house, go to a steakhouse, or take a spontaneous vacation:

Buy income-producing real estate. Best of both worlds. Great retirement plan when rentals are payed off in 20-30 years, fantastic for taxes, and gives you discretionary income NOW to spend on food, charity, or personal homes and indulgence.

Sounds like a decent antidote to nervously debating on the next market crash, whether this or that is market timing, is this money trapped until I am 65? Do I have to LBYM and keep working for another 30 years? etc.
Geeze, where can I buy your books and attend your seminar on the wonders of incoming-producing real estate...
The time will come, grasshopper. For there is still so much to do.

I have to say the way you describe it as "wonders" is highly accurate as I am beginning to learn more.
Rich Dad Forum is that way.... :arrow: :arrow: :arrow:

:wink:

heybro
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Re: Bogle thinks markets are fully valued

Post by heybro » Tue Oct 17, 2017 4:59 am

ByThePond wrote:
Sat Oct 14, 2017 9:45 am
I have rebalanced once in the last 20 years, going from 100% to 65% equities, and this at age 62. Very stable job, etc. It's been a nice ride up.

0% international, for the usual reasons.

tadamsmar wrote:
Sat Oct 14, 2017 3:05 am


It would be interesting to know what percentage of Bogleheads never rebalance and never buy international.
What are the usual reasons, please?

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

Post by Mr.BB » Tue Oct 17, 2017 5:21 am

TJSI wrote:
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
+1
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

herpfinance
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Location: Denmark

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

Post by herpfinance » Tue Oct 17, 2017 8:12 am

Sound advice from Mr. Bogle.

I have no plans to change asset allocation at this time, as stocks are still much more attractive on a valuation basis than bonds. Additionally, I already lean conservative.
"The intelligent investor is a realist who sells to optimists and buys from pessimists" - Benjamin Graham

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