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August 12, 2012

Do you agree with John C. Bogle’s philosophies?

Jeff Sommer’s article “A Mutual Master, Too Worried to Rest” in Sunday’s The New York Times provides a summary of Mr. Bogle’s accomplishments and his philosophies. 
John Bogle sees uncertainty and thinks “This is the worst time for investors that he has ever seen…”  “Even so, he says, long-term investors must hold stocks, because risky as the market may be, it is still likely to produce better returns than the alternatives.  “Wise investors won’t try to outsmart the market,” he says. “They’ll buy index funds for the long term, and they’ll diversify.

Generally he belies in bonds as an alternative to stocks.  He believes that bonds do not look
good for the next decade.  “Dark as this outlook may be, he says, people need to “stay the course” if they are to have hope of buying homes or putting children through college or retiring in comfort.”
He is still preaching the gospel of long-term, low-cost investing. “My ideas are very simple,” he says: “In investing, you get what you don’t pay for. Costs matter. So intelligent investors will use low-cost index funds to build a diversified portfolio of stocks and bonds, and they will stay the course. And they won’t be foolish enough to think that they can consistently outsmart the market.”
The article discusses some of his other beliefs he has to improve investing environment.  He was criticized when he created index funds and Vanguard.  Index funds “…are now the industry standard”.
John Bogle’s philosophies have not always been accepted.  Many now believe that his long term approach to investing were (are) right.  Implementing them is difficult and requires patience and perseverance.
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