Bogle has a forecast...

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patrick013
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Bogle has a forecast...

Post by patrick013 » Sat Oct 28, 2017 1:23 pm

Bogle's 'Reasonable Expectations...

I think bonds will return more eventually however.
age in bonds, buy-and-hold, 10 year business cycle

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Sandtrap
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Re: Bogle has a forecast...

Post by Sandtrap » Sat Oct 28, 2017 1:35 pm

Thanks for the link. Great video. Should be watched often.
Reminder to keep costs as low as possible.

So, time to dump all active managed funds in one's portfolio? :shock:

Including the venerable Wellesley/Wellington twins? :shock:

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LadyGeek
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Re: Bogle has a forecast...

Post by LadyGeek » Sat Oct 28, 2017 1:39 pm

The video was done during the 2017 Bogleheads Conference in Philadelphia.

It's in the wiki, along with a few more: Bogleheads® 16 videos
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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CyberBob
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Re: Bogle has a forecast...

Post by CyberBob » Sat Oct 28, 2017 10:10 pm

Sandtrap wrote:
Sat Oct 28, 2017 1:35 pm
Thanks for the link. Great video. Should be watched often.
Reminder to keep costs as low as possible.

So, time to dump all active managed funds in one's portfolio? :shock:

Including the venerable Wellesley/Wellington twins? :shock:
In an Investor's Business Daily interview, Jack Bogle seems to say that Wellington isn't the magical fund some people think it is:
John Bogle wrote:In Wellington Fund's case, in the last decade 97% of its return has been determined by the return of the index I put together for them in 1978.
http://news.investors.com/investing-mut ... ut.htm?p=1

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Sandtrap
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Re: Bogle has a forecast...

Post by Sandtrap » Sat Oct 28, 2017 10:14 pm

CyberBob wrote:
Sat Oct 28, 2017 10:10 pm
Sandtrap wrote:
Sat Oct 28, 2017 1:35 pm
Thanks for the link. Great video. Should be watched often.
Reminder to keep costs as low as possible.

So, time to dump all active managed funds in one's portfolio? :shock:

Including the venerable Wellesley/Wellington twins? :shock:
In an Investor's Business Daily interview, Jack Bogle seems to say that Wellington isn't the magical fund some people think it is:
John Bogle wrote:In Wellington Fund's case, in the last decade 97% of its return has been determined by the return of the index I put together for them in 1978.
http://news.investors.com/investing-mut ... ut.htm?p=1
True.
But why does Wellesley and Wellington seem to end up in so many portfolios despite being active vs indexed?

Wakefield1
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Re: Bogle has a forecast...

Post by Wakefield1 » Sat Oct 28, 2017 10:45 pm

Sandtrap wrote:
Sat Oct 28, 2017 10:14 pm
CyberBob wrote:
Sat Oct 28, 2017 10:10 pm
Sandtrap wrote:
Sat Oct 28, 2017 1:35 pm
Thanks for the link. Great video. Should be watched often.
Reminder to keep costs as low as possible.

So, time to dump all active managed funds in one's portfolio? :shock:

Including the venerable Wellesley/Wellington twins? :shock:
In an Investor's Business Daily interview, Jack Bogle seems to say that Wellington isn't the magical fund some people think it is:
John Bogle wrote:In Wellington Fund's case, in the last decade 97% of its return has been determined by the return of the index I put together for them in 1978.
http://news.investors.com/investing-mut ... ut.htm?p=1
True.
But why does Wellesley and Wellington seem to end up in so many portfolios despite being active vs indexed?
Perception that they might give some downside protection in a down market and yet (in the case of Wellington) has returns almost as high as an all stock fund in case of good markets (actually one retirement seminar's printed material seemed to claim that Wellington over a very long period (30 years?) beat the "aggressive growth funds"
also the name has a certain cachet
"one fund and forget it" although they have competition from the target date "retirement" funds

venkman
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Re: Bogle has a forecast...

Post by venkman » Sat Oct 28, 2017 10:45 pm

Sandtrap wrote:
Sat Oct 28, 2017 10:14 pm
True.
But why does Wellesley and Wellington seem to end up in so many portfolios despite being active vs indexed?
The ER of Wellington Admiral shares is only .16%, which is on par with Vanguard's Lifestrategy and Target Retirement funds.

Active funds as a group don't lose to index funds because active managers are bad at picking stocks; they lose because active funds have higher expenses. I wouldn't want Wellesley or Wellington as my core holding because they aren't diversified enough. But I wouldn't object to holding them as part of my overall portfolio.

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Re: Bogle has a forecast...

Post by Sandtrap » Sat Oct 28, 2017 10:53 pm

venkman wrote:
Sat Oct 28, 2017 10:45 pm
Sandtrap wrote:
Sat Oct 28, 2017 10:14 pm
True.
But why does Wellesley and Wellington seem to end up in so many portfolios despite being active vs indexed?
The ER of Wellington Admiral shares is only .16%, which is on par with Vanguard's Lifestrategy and Target Retirement funds.

Active funds as a group don't lose to index funds because active managers are bad at picking stocks; they lose because active funds have higher expenses. I wouldn't want Wellesley or Wellington as my core holding because they aren't diversified enough. But I wouldn't object to holding them as part of my overall portfolio.
Okay. That explains why there have been quite a few prior threads combining either of the W's with Life Strategy or Target Retirement.
True?

columbia
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Re: Bogle has a forecast...

Post by columbia » Sun Oct 29, 2017 12:34 pm

At end of this video on ETFs, he's clearly pretty indifferent to tax loss harvesting.

http://news.morningstar.com/cover/video ... ?id=830768

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Toons
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Re: Bogle has a forecast...

Post by Toons » Sun Oct 29, 2017 12:39 pm

columbia wrote:
Sun Oct 29, 2017 12:34 pm
At end of this video on ETFs, he's clearly pretty indifferent to tax loss harvesting.

http://news.morningstar.com/cover/video ... ?id=830768
:thumbsup
Thanks
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Will do good
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Re: Bogle has a forecast...

Post by Will do good » Sun Oct 29, 2017 12:53 pm

I hope Jack is right, love to have real 4% return on stock and 3% on bonds.

TheHouse7
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Re: Bogle has a forecast...

Post by TheHouse7 » Sun Oct 29, 2017 3:56 pm

I'm thinking average is what will be insane! I have a +15% nominal this year. Next year -10%?!
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

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patrick013
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Re: Bogle has a forecast...

Post by patrick013 » Mon Nov 13, 2017 4:21 pm

I think Bogle's formulation quite pragmatic. So we hear all day
long about high valuations, the 500 at 3000, interest rates spiking.....
All journalism to sell some newsletter.

Image

Here we have the 500 priced at small earnings growth, current PE, very
simple chart. If EPS reaches 120 we can see the price around 3000.
Maybe.....

But lower estimates are always better. The lower PE's eventually.
age in bonds, buy-and-hold, 10 year business cycle

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Re: Bogle has a forecast...

Post by oldcomputerguy » Mon Nov 13, 2017 4:24 pm

Will do good wrote:
Sun Oct 29, 2017 12:53 pm
I hope Jack is right, love to have real 4% return on stock and 3% on bonds.
No kidding. My plan hopes for a 2% nominal return. If I can get 3.6% (assuming 60/40 stocks/bonds) real, I'll be thrilled.
:greedy :moneybag
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SimplicityNow
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Re: Bogle has a forecast...

Post by SimplicityNow » Mon Nov 13, 2017 7:46 pm

oldcomputerguy wrote:
Mon Nov 13, 2017 4:24 pm
Will do good wrote:
Sun Oct 29, 2017 12:53 pm
I hope Jack is right, love to have real 4% return on stock and 3% on bonds.
No kidding. My plan hopes for a 2% nominal return. If I can get 3.6% (assuming 60/40 stocks/bonds) real, I'll be thrilled.
:greedy :moneybag
I think Jack also mentioned he expects a 2% decrease in valuation. When you take that into consideration you are looking at 2% real not 4%.

I think the numbers he was throwing around 2% real for stocks 0.5% for bonds. I believe that prediction was for the ten years 2017-2026.

S&P 500 is up about 17% YTD. If it finishes the year there and inflation stays around 2% you have a 15% YTD real return. The makes the next 9 years real return not looking so hot.

At the conference I think someone asked him something about whether in light of the fact that the market is up so much this year how he still feels about his prediction. I think he mentioned something about he might have gone 1% higher is his prediction for increased profits.

He also qualified his remarks by saying he could be completely wrong and that the best part of his prediction is that he wouldn't be around to see if he was right or not. I hope he is wrong (the part about him not being around).

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Will do good
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Re: Bogle has a forecast...

Post by Will do good » Tue Nov 14, 2017 12:35 pm

SimplicityNow wrote:
Mon Nov 13, 2017 7:46 pm
oldcomputerguy wrote:
Mon Nov 13, 2017 4:24 pm
Will do good wrote:
Sun Oct 29, 2017 12:53 pm
I hope Jack is right, love to have real 4% return on stock and 3% on bonds.
No kidding. My plan hopes for a 2% nominal return. If I can get 3.6% (assuming 60/40 stocks/bonds) real, I'll be thrilled.
:greedy :moneybag
I think Jack also mentioned he expects a 2% decrease in valuation. When you take that into consideration you are looking at 2% real not 4%.

I think the numbers he was throwing around 2% real for stocks 0.5% for bonds. I believe that prediction was for the ten years 2017-2026.

S&P 500 is up about 17% YTD. If it finishes the year there and inflation stays around 2% you have a 15% YTD real return. The makes the next 9 years real return not looking so hot.

At the conference I think someone asked him something about whether in light of the fact that the market is up so much this year how he still feels about his prediction. I think he mentioned something about he might have gone 1% higher is his prediction for increased profits.

He also qualified his remarks by saying he could be completely wrong and that the best part of his prediction is that he wouldn't be around to see if he was right or not. I hope he is wrong (the part about him not being around).
You are correct, I miss read the 4% real. :oops:
I sure hope the 17% grain this year is not included in Jacks's 10 years forecast. I hope he's wrong about this forecast and not being around too.

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Re: Bogle has a forecast...

Post by MotoTrojan » Tue Nov 14, 2017 12:45 pm

TheHouse7 wrote:
Sun Oct 29, 2017 3:56 pm
I'm thinking average is what will be insane! I have a +15% nominal this year. Next year -10%?!
You sound like you started investing recently and aren't aware of the normal way the market moves. It is rare to have the market return within a couple % of the long-term average. Rather, it frequently has huge double-digit ups, years of downs (or a big one), etc...

Next year could be 35% up, or it could be 50% down. Who cares, you aren't selling everything next year, are ya?

EDIT: Upon a quick glance at old posts, looks like you've been invested in S&P 500 since early 2000's. Bit confused at your post now.

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Sandtrap
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Re: Bogle has a forecast...

Post by Sandtrap » Tue Nov 14, 2017 2:25 pm

TheHouse7 wrote:
Sun Oct 29, 2017 3:56 pm
I'm thinking average is what will be insane! I have a +15% nominal this year. Next year -10%?!
Wow! :shock:
How did you get +15% ??????

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patrick013
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Re: Bogle has a forecast...

Post by patrick013 » Thu Nov 16, 2017 7:05 pm

SimplicityNow wrote:
Mon Nov 13, 2017 7:46 pm

I think Jack also mentioned he expects a 2% decrease in valuation. When you take that into consideration you are looking at 2% real not 4%.
Based on 10 year TRSY interest rates vs 500 earnings yield very possible. PE's will lower
if interest rates spike to help the economy. A BBB rated yield comparison is probably
better. This thing only has a 70% correlation. Too lazy on my part.
Image
age in bonds, buy-and-hold, 10 year business cycle

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Re: Bogle has a forecast...

Post by ZWorkLess » Thu Nov 16, 2017 7:54 pm

Sandtrap wrote:
Tue Nov 14, 2017 2:25 pm
TheHouse7 wrote:
Sun Oct 29, 2017 3:56 pm
I'm thinking average is what will be insane! I have a +15% nominal this year. Next year -10%?!
Wow! :shock:
How did you get +15% ??????
Whelp, as of 11/15, Vanguard Target Date 2035 (VTTHX) shows a YTD return of 14.99% and a 1 year return of 17.45%, and Vanguard Total Stock Market Admiral Shares (VTSAX) has 15.82% YTD and 19.34 1 year return. So, if you're mostly in total stock market or similar funds, then I'd think that those returns would be expected for this past (crazy good) year.

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