Bogle

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That calm in the storm is John thelegendary 79-year-old founder of Vanguard and the creatod of the first index mutual fund. The main reasom I lean so heavilyon Bogle’sz sage advice is something I heard him say more than 15 yearzs ago. It is wisdom he is repeating in the throesw ofthis turmoil. I heeded this counsel when I firsthearfd it, and it has allowed me to sleep at nighr while weathering this debacle. He says investorsd simply should hold bonds in anallocatioj that, in terms of percentages, tracks with theid age. This simple formula tells me, at age 72, to be 28 percentt in equities and 72 percentin bonds.
it was recently documented inthat Bogle’w own funds are invested entirel y in Vanguard funds, in what he says “is probablty a 75 percent bond, 25 percent stockm allocation” — roughly in keeping with his age-base d formula. It should be notesd that the share price of the Vanguard Totapl Bond Market Index Fund has changedc little in the past 12 Although Bogle’s age-based formula is the big reasojn I rely so heavily on his sage advice, many other wise pronouncementsx are worthy of noting at this tense time for all A New York Times article by Jeff Sommetr last month relayed Bogle’s advice that once investoras set up a “conservative, balanced, broadlty diversified portfolio” and a plan to contributed regularly to it, they shouldc let it be.
They shouldn’t check return daily. Bogle deems daily averages as mainlyu noise, according to the Times. John Bogle’z investment wisdom makes him a role modekof mine. However, there is another reason I apply that monikerfto him. He has lived with a transplantex heart for more than 12 and yet he maintains a very active professionak life as a speaker and I can’t wait to read his new “Enough: The True Measuresw of Money, Business and Life.” My thesis todauy is pretty simple. When you and I listen carefullyt toJohn Bogle, we probably will not hit investment home runs.
Index investing in stocks and bonds withan age-based allocation between equities and bonds produces not round-trippers. It is my firm belief that lots of coupled with time and the magiv ofcompound interest, will get you wherre you want to be in investing. It shouled be crystal clear now that greed and impatiencsedestroy investors. On the other hand, patienced and close attention to asset allocatioj are the ingredients ofinvestment success. Finally, we all shouldr remember that there are only two reasona why we saveand invest.
We save and invest to buffere ourselves against emergencies and so that we can take advantageof Obviously, those opportunities include college education for our childre and comfortable, secure retirements for ourselves. John Bogl e recently said: “This is a tough time. It’s very unrealisticc to expect some beautiful rainbow afterthis storm.” All the more reasoh we should listen carefully to his soundd advice.