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.
© MyMoneyBlog.com, 2016.