Tags: bogle | bonds | unstable | government

Bogle: Buy Bonds to Protect Yourself From 'Unstable' US Govt

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Wednesday, 12 December 2018 04:49 PM

Investment guru Jack Bogle reportedly warns that investors need to re-examine their portfolios to make sure they have enough exposure to bonds to protect against what the investment legend calls an “unstable U.S. federal government” and a “Brexit debacle.”

The 89-year-old founder of asset management giant Vanguard told the London Financial News: “Investors are not paying nearly enough attention to the risks that could affect our markets: an unstable U.S. federal government, a Brexit debacle, and a U.S. stock market that remains at relatively high valuations.

“Most investors would be wise to re-examine their portfolios to make sure that they are balanced with an appropriate bond position to provide some stability in volatile markets,” Bogle said.

Bogle added that investors making the switch would “sleep better, lower their risks, and maybe even improve their long-term returns.”

Meanwhile, Bogle happily admitted to the Wall Street Journal that everything a person needs to know about investing can be put on a 3x5 index card.

  • Own the entire stock market. “The S&P 500 is a great proxy,” he says in a recent interview.
  • Do nothing. “Not selling,” he says. “Not moving from one winner to another or one loser to another.”
  • Do it at very low costs. In other words: an index fund with low fees rather than an actively managed fund with high costs.

“There are a lot of people that won’t pay a damn bit of attention to that,” Bogle says. “To them, I say, OK, pick a couple of mutual funds, including an S&P 500 index fund, and after five years evaluate how they’ve done. If the managed funds have done a lot better, maybe you’re just a smart picker, or maybe it’s just the climate.” But Bogle says he thinks it’s unlikely that the active fund will outperform the index.

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Investment guru Jack Bogle reportedly warns that investors need to re-examine their portfolios to make sure they have enough exposure to bonds to protect against what the investment legend calls an “unstable U.S. federal government” and a “Brexit debacle.”
bogle, bonds, unstable, government
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2018-49-12
Wednesday, 12 December 2018 04:49 PM
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