Author Topic: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'  (Read 2738 times)

italianant

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My husband sent me this today. Thoughts? Will you be changing your strategy more conservatively?

https://www.cnbc.com/2018/12/31/jack-bogles-warning-invest-in-2019-with-a-little-extra-caution.html

NWOutlier

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #1 on: December 31, 2018, 03:35:38 PM »
For me, I'll continue to dollar cost avg max 401k, 2xROTH IRA's, HSA, then what's left will go into a taxable account.  So, basically - I'm staying the course... if the market does provide negative or low returns, it's ok for me, I will just get more shares per dollar during these times... I have a 5-15 year time horizon before I need the money... so I'm looking to accumulate as many shares as possible.

I'll continue reading, thanks for sharing the link! -

Best Regards,

NWOutlier (Steve)

italianant

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #2 on: December 31, 2018, 04:13:29 PM »
For me, I'll continue to dollar cost avg max 401k, 2xROTH IRA's, HSA, then what's left will go into a taxable account.  So, basically - I'm staying the course... if the market does provide negative or low returns, it's ok for me, I will just get more shares per dollar during these times... I have a 5-15 year time horizon before I need the money... so I'm looking to accumulate as many shares as possible.

I'll continue reading, thanks for sharing the link! -

Best Regards,

NWOutlier (Steve)

Agreed! Trying my best to not time the market and instead focus on the big picture. I think the article is really interesting since it's coming from Mr. Bogle himself though!

TheHardenedInvestor

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Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #3 on: December 31, 2018, 04:37:31 PM »
For me, I'll continue to dollar cost avg max 401k, 2xROTH IRA's, HSA, then what's left will go into a taxable account.  So, basically - I'm staying the course... if the market does provide negative or low returns, it's ok for me, I will just get more shares per dollar during these times... I have a 5-15 year time horizon before I need the money... so I'm looking to accumulate as many shares as possible.

I'll continue reading, thanks for sharing the link! -

Best Regards,

NWOutlier (Steve)

Agreed! Trying my best to not time the market and instead focus on the big picture. I think the article is really interesting since it's coming from Mr. Bogle himself though!

Well, consider that Bogle plays more defense due to being retired and often makes suggestions as such. Would he suggest that someone with 20+ year timespan do anything? No. 100% stocks has been the best allocation for such a time period. You will have to decide your financial ability to assume risk, and your emotional capacity to withstand risk. If you have a big liability on the table (large percentage loan), then focusing money there would be advisable. You would want to do that if your financial ability to assume risk is low and the market isn’t expected to have a large return. If you can withstand anything the market throws at you due to your financial stability and emotional capacity to never panic sell. Then 80/20, 90/10, 95/5 is perfectly fine.

Rollin

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #4 on: December 31, 2018, 05:41:35 PM »
A "little" extra caution. Going from 70/30 to 60/40 is what was suggested. 10% is just an adjustment, and I don't see it as drastic.

MustacheAndaHalf

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #5 on: January 01, 2019, 06:55:14 AM »
For the foreseeable future, who knows who will be right.  Anyone predicting the next 12 months of the stock market has to mostly count on luck to be right.  That goes for the esteemed Vanguard founder, as well, in my view.  To me, the beauty of index funds is that you don't make predictions, you just stick with the market through ups and downs.

Despite that, I'm tilting very slightly (few %) into the market.  It's more of a "bond tent" approach than anything, but I also expect the market will at some point recover - which hopefully makes current prices look good.  But nobody knows when that will be.
« Last Edit: January 01, 2019, 06:57:19 AM by MustacheAndaHalf »

frugal_c

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #6 on: January 01, 2019, 03:55:34 PM »
I am going the other way and bumping up my stock allocation.  Who knows.  I have been meaning to put more into stocks for a few years and prices have rolled back so it seems like a good time to do this.  I have been though multiple huge crashes including 2008/09 and the 2000-2002 crash.  Also the 2016 mini meltdown and I think there was a hiccup crash in 2011.  I just bump my stock percent up during the crash and when things get really expensive I pull them down a touch.   Call it what you will, i sleep well at night.

freedomfightergal

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #7 on: January 01, 2019, 05:03:25 PM »
My husband sent me this today. Thoughts? Will you be changing your strategy more conservatively?

https://www.cnbc.com/2018/12/31/jack-bogles-warning-invest-in-2019-with-a-little-extra-caution.html

Geez, does he and some others no something the rest of us don't????   I've been wondering that or I'll wonder if there are some "puppeteers, pulling strings to crash the market and make a killing when they start aggressively buying to pump it up"????  Isn't he about not timing the market??

I often find that articles suggest the exact opposite of what seems to be the right thing to do.  Like guides on how to improve your Credit score - get more lines of credit, take out an Auto loan, don't pay off your mortgage, stupid directions like that.  Having very little debt for a long time has given me a crap Credit score, not that I really care, but I couldn't get a credit card (to churn for cash back), because my score was too low.  But someone with a bunch of credit cards, auto loan, HELOC, Mortgage etc up to the eyeballs probably has a better chance.  I don't think this is an accident.  It's the system pretending to help us just trying to latch on like a bunch of leeches and keep you in the rat race. 

ooops, ended up ranting a bit!


freedomfightergal

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #8 on: January 01, 2019, 05:08:48 PM »
I am going the other way and bumping up my stock allocation.  Who knows.  I have been meaning to put more into stocks for a few years and prices have rolled back so it seems like a good time to do this.  I have been though multiple huge crashes including 2008/09 and the 2000-2002 crash.  Also the 2016 mini meltdown and I think there was a hiccup crash in 2011.  I just bump my stock percent up during the crash and when things get really expensive I pull them down a touch.   Call it what you will, i sleep well at night.

Yes I'm going to increase VTSAX, I think now it's better to buy than when it's been high.  I'm thinking if I don't, it's like I have zero faith in the total stock market and economy.  Even though no one knows the future, I'd like to be somewhat optimistic that there won't be a complete collapse and no increases ever again.  The alternative is to buy bonds?  They seem to be be dropping.  My hedge is cash in 2.25% savings account and mortgage pay down, for now.


Travis

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #9 on: January 01, 2019, 07:25:15 PM »
A "little" extra caution. Going from 70/30 to 60/40 is what was suggested. 10% is just an adjustment, and I don't see it as drastic.

Yes, but the demigod of individual investors just gave an inch.  Now you'll see the doom and gloom financial pundits go for the jugular.

v8rx7guy

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #10 on: January 01, 2019, 07:48:04 PM »
Surprising advice from Bogle

Radagast

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #11 on: January 01, 2019, 08:47:17 PM »
Lets break this down into life stages.
1) FIRE'd: You probably rebalanced earlier in 2018 when the market was near its peak. Thanks to the decline, a 70/30 investor already became a 60/40 investor by doing nothing. So, umm thanks?
2) Just starting: If you have a bond allocation at all, you invest so much money every month that you have been able to keep it in balance. By far the best thing you can do is shovel money into the dips and ignore Bogle.
3) Approaching FIRE: You have a plan to deal with sequence of returns risk and are following through with it. So obviously this advice doesn't apply.

I guess I can't think of a single person who would benefit from hearing this.

soccerluvof4

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #12 on: January 02, 2019, 07:21:23 AM »
Have been for 4 years and will remain to be at 60/40 unless we have some major event and drop like 50% then probably 80/20, maybe even higher depending on where I am with my life and needs.

Indexer

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #13 on: January 02, 2019, 09:54:25 PM »
Quote from: John Bogle
“If you were comfortable at a 70% to 30% [allocation to stocks and fixed income], under these circumstances you’d like to go back to 60% to 40% or something like that,”

Bold by me. That doesn't sound like market timing. It sounds like rebalancing. We don't have the full transcript. We have a bunch of partial quotes without context.

They might have asked Bogle what someone should do if they were concerned about the markets. In that context...

"It’s time to really be thinking how much risk you want to have"

"If you were comfortable at a 70% to 30% [allocation to stocks and fixed income], under these circumstances you’d like to go back to 60% to 40% or something like that,"

"Keep investing, no matter how frightened you are."

"If I had a big liability in a year, I’d get prepared for it right now,"

... would all be great advice.

ysette9

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Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #14 on: January 02, 2019, 10:24:20 PM »
Lets break this down into life stages.
1) FIRE'd: You probably rebalanced earlier in 2018 when the market was near its peak. Thanks to the decline, a 70/30 investor already became a 60/40 investor by doing nothing. So, umm thanks?
2) Just starting: If you have a bond allocation at all, you invest so much money every month that you have been able to keep it in balance. By far the best thing you can do is shovel money into the dips and ignore Bogle.
3) Approaching FIRE: You have a plan to deal with sequence of returns risk and are following through with it. So obviously this advice doesn't apply.

I guess I can't think of a single person who would benefit from hearing this.
ImQwin

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Edit: I meant to put a reply here but fat-fingered something on my phone without realizing it. What I meant to say is that option 3 described above is where we are. We are on a path of increasing our bonds now, but we are “life timing”, not market timing. Bummer though that we didn’t happen to increase that bond % 6 months ago..... so be it.
« Last Edit: January 03, 2019, 09:44:29 AM by ysette9 »

italianant

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #15 on: January 03, 2019, 08:14:30 AM »
Quote from: John Bogle
“If you were comfortable at a 70% to 30% [allocation to stocks and fixed income], under these circumstances you’d like to go back to 60% to 40% or something like that,”

Bold by me. That doesn't sound like market timing. It sounds like rebalancing. We don't have the full transcript. We have a bunch of partial quotes without context.

They might have asked Bogle what someone should do if they were concerned about the markets. In that context...

"It’s time to really be thinking how much risk you want to have"

"If you were comfortable at a 70% to 30% [allocation to stocks and fixed income], under these circumstances you’d like to go back to 60% to 40% or something like that,"

"Keep investing, no matter how frightened you are."

"If I had a big liability in a year, I’d get prepared for it right now,"

... would all be great advice.

For additional details, the article has a link that provides more details regarding the interview:
https://www.barrons.com/articles/vanguard-founder-jack-bogle-on-the-stock-market-51545950443

WhiteTrashCash

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #16 on: January 03, 2019, 05:24:26 PM »
80% VTSAX, 20% VBTLX. Got it, Jack. Thanks for the advice.

effigy98

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #17 on: January 03, 2019, 06:16:36 PM »
The comment gave me pause as his opinion should be highly respected. With zero debt, no mortgage, 90% savings rate, and best earning years of my life, going to stick with 70/30 which feels ultra conservative already. If the market really tanks going to start moving more aggressive into equities.
« Last Edit: January 03, 2019, 06:25:38 PM by effigy98 »

Radagast

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #18 on: January 03, 2019, 08:31:14 PM »
ImQwin

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Edit: I meant to put a reply here but fat-fingered something on my phone without realizing it. What I meant to say is that option 3 described above is where we are. We are on a path of increasing our bonds now, but we are “life timing”, not market timing. Bummer though that we didn’t happen to increase that bond % 6 months ago..... so be it.
Thanks for the clarification. I even entered ImQwin into google to see what it meant but didn't find anything :)

I'm in the beginner category myself, though we do plan to pick up a house in 1-5 years and need a plan for that.

ysette9

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Re: Jack Bogle's warning: Invest in 2019 with 'a little extra caution'
« Reply #19 on: January 03, 2019, 09:44:10 PM »
ImQwin

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Edit: I meant to put a reply here but fat-fingered something on my phone without realizing it. What I meant to say is that option 3 described above is where we are. We are on a path of increasing our bonds now, but we are “life timing”, not market timing. Bummer though that we didn’t happen to increase that bond % 6 months ago..... so be it.
Thanks for the clarification. I even entered ImQwin into google to see what it meant but didn't find anything :)

I'm in the beginner category myself, though we do plan to pick up a house in 1-5 years and need a plan for that.
Haha
Sorry to send you on a nonsense path trying to figure out what that meant!