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apteacher

Bogle Opinion Piece

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"If there is anything that mutual fund investors have learned during the volatile past decade, it's that the past is not prologue. Between December 1999 and December 2009, U.S. stocks on the S&P 500 had an annualized total return of -0.9%. That's one of the four lowest for any decade in the past century and a far cry from the long-term average of 8.1%."

 

I have great respect for Bogle, but following his advice (no load funds, broad diversification, index funds, dollar cost averaging) has been awful for me for the past ten years. Where has "doing all the right things" gotten me since 2000? Nowhere. Absolutely nowhere.

 

I just laugh when I hear about "stock market recovery ... Dow Jones up to 10,400 ..." Do the morons who report this understand that the D-J is DOWN from a high of >14,000 a few years ago? This is a "recovery?" Give me a break.

 

The cold, hard truth is that we would have all been better by just avoiding stocks and staying in cash the past ten years. People like me just drank in the Kool Aid of doing all the "right things." What a joke. Stocks are ~26% below what they were three years ago. Lord knows how long it will take for stocks just to reach their level of 2007, let alone actually going beyond that level.

 

Does anyone else see a Japanization of the US?

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"If there is anything that mutual fund investors have learned during the volatile past decade, it's that the past is not prologue. Between December 1999 and December 2009, U.S. stocks on the S&P 500 had an annualized total return of -0.9%. That's one of the four lowest for any decade in the past century and a far cry from the long-term average of 8.1%."

 

I have great respect for Bogle, but following his advice (no load funds, broad diversification, index funds, dollar cost averaging) has been awful for me for the past ten years. Where has "doing all the right things" gotten me since 2000? Nowhere. Absolutely nowhere.

(What is the alternative? What was your bond allocation?)

 

I just laugh when I hear about "stock market recovery ... Dow Jones up to 10,400 ..." Do the morons who report this understand that the D-J is DOWN from a high of >14,000 a few years ago? This is a "recovery?" Give me a break.

(I take what I hear from CNBC, WSJ, with a grain of salt. 99% of the financial news from this media is "financial ######" (Jane Bryant Quinn).

 

The cold, hard truth is that we would have all been better by just avoiding stocks and staying in cash the past ten years. People like me just drank in the Kool Aid of doing all the "right things." What a joke. Stocks are ~26% below what they were three years ago. Lord knows how long it will take for stocks just to reach their level of 2007, let alone actually going beyond that level.

Sure, you could have done better in an Indexed Annuity too. Every bond beat the S&P 500, so what else is new? What are you going to do going forward?

 

Does anyone else see a Japanization of the US?

I have no idea what is going to happen in the future, except one thing: what ever happens will not be predicted by anybody it will be a complete surprise.

 

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"If there is anything that mutual fund investors have learned during the volatile past decade, it's that the past is not prologue. Between December 1999 and December 2009, U.S. stocks on the S&P 500 had an annualized total return of -0.9%. That's one of the four lowest for any decade in the past century and a far cry from the long-term average of 8.1%."

 

I have great respect for Bogle, but following his advice (no load funds, broad diversification, index funds, dollar cost averaging) has been awful for me for the past ten years. Where has "doing all the right things" gotten me since 2000? Nowhere. Absolutely nowhere.

(What is the alternative? What was your bond allocation?)

 

I just laugh when I hear about "stock market recovery ... Dow Jones up to 10,400 ..." Do the morons who report this understand that the D-J is DOWN from a high of >14,000 a few years ago? This is a "recovery?" Give me a break.

(I take what I hear from CNBC, WSJ, with a grain of salt. 99% of the financial news from this media is "financial ######" (Jane Bryant Quinn).

 

The cold, hard truth is that we would have all been better by just avoiding stocks and staying in cash the past ten years. People like me just drank in the Kool Aid of doing all the "right things." What a joke. Stocks are ~26% below what they were three years ago. Lord knows how long it will take for stocks just to reach their level of 2007, let alone actually going beyond that level.

Sure, you could have done better in an Indexed Annuity too. Every bond beat the S&P 500, so what else is new? What are you going to do going forward?

 

Does anyone else see a Japanization of the US?

I have no idea what is going to happen in the future, except one thing: what ever happens will not be predicted by anybody it will be a complete surprise.

 

 

 

- My bond allocation has ranged from 40% earlier in the decade to the current level of 60%. Bonds, to be sure, have provided somewhat of a cushion for my portfolio, but the stock market losses have overwhelmed the bond gains. And I'm just waiting for bonds to get hammered when interest rates rise from their record lows.

 

- What am I going to do going forward? Just what I am doing now: no load index funds, broad diversification, dollar cost averaging, maximizing 403b contributions -- all of the "right" things that got me nowhere for the last ten years. I have totally bought into the "stay the course" Kool Aid, much to the regret of my portfolio. I know that markets have ups and downs in the short run, but how does one define "short run?" Ten years is a pretty long "short run."

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