Buy everything and hold it forever - Jack Bogle

last month on Louis Rukeyser you summed up your investment philosophy as buy everything and hold it forever do you still subscribe to that in in light of what the market has been doing or would you unload some things now no I my theory is not subject to the ups and downs the peregrinations of the sky the unpredictable peregrinations of the stock market it's painful to do but I think the idea of owning the stock market is the best approach to equity investing and perhaps I didn't make that thoroughly clear there I have never felt that equities should be the only portion of an investor's long term program I myself about 50% stocks 50% bonds for example I was brought up when I came into this business in 1951 with a Wellington fund which was and is and I hope always will be a conservative balanced fund but I think the idea of buying and holding forever enough trying to make adjustments requires that you've gotten it right in the first place that you can only you can only hold tight if you've bought right if you will and that is to say have an asset allocation that has something to do with how many years you have to accumulate money how much resources you have at stake how much income you need and how much courage you have to ride out the peregrinations of the market so you've got to take all that into account from that simple statement you are the godfather of index funds aimed at the average investor and this questioner points out that actively managed funds have outperformed into indexed over the last two years is there a case then for market timing what should you do when the index funds are losing money well as said my friend Jim Glassman quoted me and is a op-ed piece in The Wall Street Journal yesterday I quote I don't remember where I made but it said I don't know anybody who has ever been successful in timing the market I don't even know anybody who knows anybody who has ever been successful in timing the market last year these last two years the end the index SP index has outperformed roughly half of the funds little bit less last year just about half this year I don't regard that as a significant long term sign at all first of all all the number of funds is not a relevant statistic we use it because it's convenient but if you've got a few little funds in there that do well they count just as much as a few big funds the reality is no matter what the statistics tell you indexing always wins I say that because index is delivering a market return and all those investors out there are by definition getting the market return themselves less cost so statistics don't capture that index advantage it will be corrected next year or the next year and by the way if you look at the even the last 15 years counting those last two years the indexes outperformed about 75% of all active managers someone out there will want to take careful notes here because we're going to go from the general to the very specific for the past 15 months I've been investing 1200 dollars per month in Schwab mutual funds he or she doesn't say which swob funds should I continue or is there a better place for that money these days far be it for me to get into more in more trouble with mr. Schwab and I'm in already but leaving leaving aside that you know the infant variety of a stock of mutual funds that could be buying through any kind of a mutual fund marketplace like at Charles Schwab and the answer is yes continue to invest I've told you particularly young people and the officer really petrified by this market decline that it's the best thing that ever happens to him if you think about it logically of course it's wonderful I mean think of him say the young man I was talking to yesterday is probably 25 or 26 years old and he's got the rest of his life and investing I said well what's let's suppose and that Chris Chris got his name as I said let's suppose Chris that the markets can end up at Jim Glassman's 36000 by the time you retire do you want to be investing all your money with the debt with the when the Dow is at 35,000 or invest at all when it's 9,000 just think about that for a minute or if you want a long time to invest at low prices and it's a certainly a frightening advantage for those of us who have some money at work in the market today to think of this is a blessing but it is a blessing because in the long run investing depends on accumulating money at sound prices and not inflated prices like we have I also think the general economy and the financial markets are well served by a return to reality when you leave reality and depart from the laws of gravity there's nothing but bad things that can happen and the higher you fly the more you fall we've looked quite high enough and I think it's a blessing maybe a blessing in heavy disguise a blessing that we've come back a little bit toward the ground speaking of coming back toward the ground this investors stocks are really down dr. koop just for feet is that quickly Pharmaceuticals Cisco Lucent Technologies should I sell I haven't heard a list like that he even makes those tech funds I told you about seem like heroes I don't have any comment on those individual stocks I mean that they are hugely depressed I think dr. koop I read the other day is in danger the stock is in danger of becoming delisted I think it's sold up in the mid-30s $30 and now is something like 19 cents you know it wasn't it wasn't a good turn and it's very painful for people for speculators or people that greed overwhelm their good judgment to get hurt but will they bounce back I mean I guess the answer to that group of stocks without knowing much about Quigley's pharmaceutical and being very nervous about dr. koop is you know companies like loosen will come back in time I don't think as much question about that but to do own a handful of individual stocks I don't think is sound investing and to obviously jump on the bandwagon at a silly time is a man I feel very very sorry for the investor but I don't know how to help him now him or her you

Channel: The Financial Review

Views: 255,718

Keywords: warren buffett john bogle, warren buffett jack bogle, bogle etf, bogle indexing, bogle index fund, bogle mutual funds, charlie munger, ben graham, index investing, index funds, jack bogle book, john bogle book, investment

Id: 65FIl71bZKQ

Length: 6min 24sec (384 seconds)

Published: Fri Aug 09 2019

Reddit Comments

[u/always-indifferent]

Thanks for uploading

[u/toast2200]

Given how simple his investment strategy is, I’m always surprised by how much he knows about individual stocks. Due to my Boglehead strategy, I literally know nothing about how individual stocks are doing.

[u/Llama2Boot]

He was so eloquent.

[u/Alwaysfavoriteasian]

But that says his name is John Bogle.

[u/Easy-Priority-2703]

I'd listen to him narrate audiobooks

[u/[deleted]]

Companies like lucent will come back ? Wrong

[u/p0rty-Boi]

Can’t help but wonder what will happen as the boomers are forced to unwind long their positions to support their retirement. Seems like an unprecedented situation, imo. Biggest most financially secure generation is going to start dumping assets to pay for managed care, hospital bills and cost of living increases. I can’t help but think this will have huge ramifications for passive investors.

[u/SpaceMonkee8O]

“I don’t know anyone who’s ever been successful at timing the market.” Except maybe those managed funds he just mentioned? Isn’t his philosophy essentially just a sales pitch for his business model?

[u/CollectionLeft4538]

RIP John Bogle the God Father of the index. Yup keep it simple stupid young folks now is your time market is down pray for a recession so you can buy cheap. Investing has nothing to do with your IQ or your education.