Jack Bogle Interview

Check out this interview with the founder of Vanguard, Jack Bogle, courtesy of Money Magazine.  Nothing unprecedented, but interesting nonetheless.  He says it's the most difficult time to invest in his career right now.  Here are two interesting excerpts of Bogle's thoughts.

On the bond bubble:
Bond yields at roughly 3% are so poor it's hard to believe. I wouldn't call it a bubble, though, because if you hold for 10 years you will get that 3%.

 Why indexing works:
Indexing wins whether markets are efficient or inefficient. In an inefficient market, a good manager may be able to win by five percentage points a year over a decade. But by definition, a bad manager must lose by the same amount. It all has to average out. So even if the market is very inefficient, the index will still capture your share of the market return.  So I don't rely on the efficient-markets hypothesis. I go by the "cost matters" hypothesis: Whatever the market returns, on average you will beat your rivals if you lower your costs. And that's what index funds do.
 Here's a video of Bogle talking about his inspiration:

Related Posts Plugin for WordPress, Blogger...