Author Topic: 'Nominal to Zero % Returns' Over coming decade - Jack Bogle  (Read 2550 times)

Texan

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http://www.benzinga.com/analyst-ratings/analyst-color/15/06/5579993/exclusive-vanguard-founder-john-bogle-projects-nominal-t

Having this coming from the 'man', Vanguard founder is concerning. It is OK.. If and when the market dips, I will NOT panic and probably will buy more shares of my VTSAX.

Thoughts?

Roland of Gilead

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Re: 'Nominal to Zero % Returns' Over coming decade - Jack Bogle
« Reply #1 on: June 14, 2015, 08:02:54 AM »
My first thought is this would be the decade to implement a covered call strategy.   If returns are going to be zero %, one might do quite well writing 10% out of the money covered calls on their stocks to gain ~3% real return plus dividends.

Al1961

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Re: 'Nominal to Zero % Returns' Over coming decade - Jack Bogle
« Reply #2 on: June 14, 2015, 08:17:48 AM »
Nobody knows nothin'.

-Jack Bogle

(I should use that in my sig line.)

Indexer

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Re: 'Nominal to Zero % Returns' Over coming decade - Jack Bogle
« Reply #3 on: June 14, 2015, 08:46:35 AM »
Well first he isn't really making a prediction.  He is saying that if valuations return to their historic norms we would have low to zero returns.  Shiller is also projecting low to zero returns if that happens. 

Shiller & Bogle's math are almost identical.  Both say that 0% returns are possible if valuations returned to their historic averages.  CAPE and PE are both high.  If they return to historic norms and if growth continues at this fairly slow pace then we would have no returns over the next 10 years.

Note that is a HUGE 'if.'  CAPE and PE have both stayed above their historic averages for most of the past 2 1/2 decades.  It coincides almost perfectly with the time frame in which 401ks and discount brokers have become more popular.  More people are investing than at any point in history.  So you could build a pretty good argument that PE and CAPE ratios 10 years from now will likely still be above the historic averages.  I try not to make predictions.  I'm just pointing out you could argue it either way.

Now Vanguard and other investment firms have warned that with valuations being on the high end(but not bubble territory) returns over the next 10 years might be closer to the 5-8% range rather than the 10% historic average.
http://vanguard.com/pdf/ISGVEMO.pdf

TomTX

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Re: 'Nominal to Zero % Returns' Over coming decade - Jack Bogle
« Reply #4 on: June 14, 2015, 08:47:45 AM »
Crap article, picking out and shading what Bogle said as clickbait. No real content, no real news.

wotan

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Eric

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