Jack Bogle: The Undisputed Champion of the Long Run

Expect lower returns going forward, don’t reach for yield (I.e., take on more risk), and just save more. Another subtle but important point in the article regarding fees:

“Inattentive investors can expect to lose as much as 70% of their profits to “hidden” fund management costs in addition to the “expense ratios” touted in mutual-fund prospectuses. (These hidden costs include things like sales load, transaction costs, idle cash and inefficient taxes.)”

So yes, stocks are relatively high now. The P/E ratio is currently 25.22 well above the historical average of 15.61 (multpl.com, based on trailing 12 month earnings). Does this mean sell stocks and go to cash? No. Personally, I address high market multiples with a lower (but greater than zero) percentage of my allocation to stocks. I continue with my monthly contributions and have increased them once already this year. After reading this article, it may be time to consider another increase.

Good luck everyone!

-Dt. Moore

https://news.google.com/news/ampviewer?caurl=http%3A%2F%2Fwww.wsj.com%2Famp%2Farticles%2Fjack-bogle-the-undisputed-champion-of-the-long-run-1472855372#pt0-562693

Advertisements

Leave a Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s