Jack Bogle Reveals Change to His Investment Strategy

The 86-year-old investment legend and Vanguard founder offers sage advice.


When Jack Bogle talks, people listen. That’s because he’s the founder of Vanguard — the Valley Forge, Pa. firm that’s become one of the world’s largest investment management companies with more than $3.2 trillion in global assets.

So when I noticed this CNBC story about Bogle’s personal wealth management strategies, it piqued my interest. For years, Bogle abided by the 60-40 rule — 60 percent in a U.S. stock index fund and 40 percent in a U.S. bond index fund, CNBC reported. But recently he shifted to 50/50 plan, “which makes his portfolio slightly more conservative,” the article said.

Here are two of his investment lessons:

No investing overseas. Bogle “just believes in placing bets based on what he knows” — even though that runs counter to what Vanguard advises to clients. In fact, CNBC reported that “in 2014, Vanguard research suggested that investors allocate at least 20 percent of an equity allocation to non-U.S. stocks” and even quoted Tim McCarthy, former president of Charles Schwab saying, “no matter how great a country is, putting zero outside your own country is the wrong answer on both a risk and return basis. Having a minority portion in international over the decades will decrease your risk and increase your returns.”

Well you’ve got to reward Bogle for trusting his gut on this one.

Keep it simple, you’ll worry less. A simple plan means “it’s easy for him to track and understand, and therefore stick to.” The article goes on to say “the fundamental thing you want from your portfolio is a sense that it’s the right choice for you over the long term.” Basically, scared money doesn’t win.

“A plan that uses low-cost, diversified investments should take care of the other big risk in investing — emotions-based decision-making. For Bogle, being an investing master isn’t about the exact makeup of his portfolio; it’s about tailoring it to what feels right for him and sticking to it.”

Read the entire article here.

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