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i love this guy [John Bogle]
Old 04-27-2017, 01:07 PM   #1
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i love this guy [John Bogle]

How to keep your retirement on track if John Bogle is right about 4% stock returns - MarketWatch, wish i read his book when i was younger, better late than never
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Old 04-27-2017, 01:20 PM   #2
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Thanks.
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Old 04-27-2017, 01:36 PM   #3
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How to keep your retirement on track if John Bogle is right about 4% stock returns - MarketWatch, wish i read his book when i was younger, better late than never
Yep, a bit late for many of us but good article nonetheless
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Old 04-27-2017, 01:58 PM   #4
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Hmm.... This quote from the article has me a bit confused. In the first paragraph he says most of the return does not come from the stock market itself but from one's contributions. (Are one's own contributions a legitimate 'return'?)

But, in the second paragraph he attributes the return from year after year after year of growth from the dollars one puts in. Well, isn't that growth from the stock market (or whatever market one is invested in)

It seems poorly worded to me and confusing for the novice.

Did I miss some obvious insight?

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Most of the return you will get out of a portfolio, frankly, comes from steady, sustained contributions over the years, not from the stock market itself.


Every dollar you put in grows that year and each year thereafter. The cumulative effect swamps any given year's gains from stocks alone.
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Old 04-28-2017, 04:37 AM   #5
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What I read was: A steady investment program trumps a one time buy-in.

So: Frugality > Stock returns > Bonds

Given the current state of the market, probably:
Frugality >> Stock returns > Bonds
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Old 04-28-2017, 07:39 AM   #6
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What I read was: A steady investment program trumps a one time buy-in.

So: Frugality > Stock returns > Bonds

Given the current state of the market, probably:
Frugality >> Stock returns > Bonds
Or looking at it backward, reducing spending in retirement by $1 a year requires $25 less accumulated savings.
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Old 04-28-2017, 07:40 AM   #7
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What I read was: A steady investment program trumps a one time buy-in.
That is how I read it as well. Some years you put in and the market will not do well. Some years you put it and the market will do very well. But over the long run, the fact that you put in steadily regardless of the market is what gives you a solid footing in the long run.
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Old 04-28-2017, 08:07 AM   #8
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Quote:
Originally Posted by Chuckanut View Post
Hmm.... This quote from the article has me a bit confused. In the first paragraph he says most of the return does not come from the stock market itself but from one's contributions. (Are one's own contributions a legitimate 'return'?)

But, in the second paragraph he attributes the return from year after year after year of growth from the dollars one puts in. Well, isn't that growth from the stock market (or whatever market one is invested in)

It seems poorly worded to me and confusing for the novice.

Did I miss some obvious insight?
I've always interpreted "from one's contribution" to literally mean that. If you contribute less regularly than I do, I accumulate more $$$.

VG charts this for you in your account.

Edit:
There is a similar video and transcript at M*.
Search for "Bogle Forecasts Low Stock and Bond Market Returns" at M*. Could not get a direct link. Sorry.
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Old 04-28-2017, 11:16 AM   #9
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I love John Bogle too. He has helped Vanguard, and indeed all investors to keep more of their money, and drive down costs in the entire investment industry. He is truly a modern hero.

But... I don't get why he gets all this attention for predicting the future. With all due respect to John for all he has done, none of it has to do with his ability to predict the future. He is an advocate for passive index investing after all.

From all I can see the next thirty years (assuming we avoid nuclear wars, etc) will be the most productive and amazing in all of human history. Just looking at the advances in genetics, genetic engineering, robotics, artificial intelligence, automation in all its forms, the incredible speed at which ideas travel around the planet and are incorporated into products, and the potential synergies between all of these and you have the recipe for the fastest advancement in human history. (maybe this deserves its own thread)

However, this of course doesn't mean everyone will benefit. There will be tremendous dislocations for those without the necessary skills for these changes. But companies, and those with capital will benefit greatly. Capital is becoming more important relative to labor than in the past, at least for a while.

So while none of us have any idea what the stock market will do tomorrow, next year, or for the next decade, the future looks to me to be brighter than the past. At least for those with capital.
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