When Jack Bogle grants an interview, I sit down and take notes in case he drops something significant. Here is a link to his WSJ interview dated 9/2/2016 (paywall, use Google redirection if needed).
- Bogle estimates 2% annualized returns over the next decade (he does not forecast past that).
- Stay invested in a diversified portfolio of stocks and bonds at very low cost.
- Don’t reach for yield. You just have to save more.
- Don’t go to cash.
- He’s fine with 5% of your portfolio in gold, if you like that.
- He’s still sees no need for international stocks.
- He’s not worried about too much money flowing into index funds.
- Bogle predicts that in five years, Fidelity will be sold.
The interview is rather vague in a few areas. I am assuming that the 2% annual returns forecast applies to after-inflation returns of a 50% stock and 50% bond portfolio. This is based on Bogle’s October 2015 presentation which predicted 3% after-inflation returns for a 50/50 portfolio. Since then, stock markets are up and bond yields are down, so future expected returns are now even lower.
Another little nugget is a link to a previous WSJ interview from exactly 10 years ago – 9/2/2006. It provides some additional background to the initial creation of the first index fund for individual investors.
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I read this interview yesterday in the WSJ as well. As you said, when Bogle talks, people should listen! A little depressing about his forecasted returns over the next decade though. It’s tough to get a good return these days. More reason to run a good PF blog I suppose and encourage people to be net worthy!
I appreciate you taking the time to link to this. I hadn’t seen it, but it was well worth the read. Like many, Bogle is one of my heros.
how to bypass the paywall ?
Google the article title, and then click on the article link inside Google search results.
Hmm…this is interesting. Despite the volatility events we’ve had including the flash crash last year and the lows we made in February of this year, Lots of $$ are out of the market. Returns have been decent. 2% annualized returns is pretty dismal. ETFs in some EM have performed well. Gold? Fed has it doing a dance. Bond yields are depressing to look at while equities have soared. I’m sure monetary policies have contributed to some of these. The resulting effect? I see ketchup.
Thanks for sharing the article. I felt his op-ed in the NYT in 2009 was so on point.