|
|
10-14-2018, 01:17 PM
|
#1
|
gone traveling
Join Date: Sep 2018
Location: Washington, DC
Posts: 575
|
John Bogle...
Have been listening to the Little Book of Common Sense Investing 2017 Edition (one of several recommended on another thread), and the last chapter I listened to was pretty pessimistic on the next decade for stocks and bonds return (60/40). Based on RTM, etc, he expects conservatively about 3.6% return after all fees, inflation etc.
I sure hope he is wrong.
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
10-14-2018, 01:23 PM
|
#2
|
Thinks s/he gets paid by the post
Join Date: Dec 2016
Location: DC area
Posts: 2,479
|
Historical 60/40 gross return is 8.8% according to Vanguard. https://personal.vanguard.com/us/ins...io-allocations
Adjust for inflation and fees and that is probably a real return of about 6%, or maybe a little less. IMO a real return of 3.6% isn't great, but it is not time to hide under a chair.
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged
"All models are wrong, some are useful." - George Box
“There is always a well-known solution to every human problem: neat, plausible, and wrong.” - H.L. Mencken
|
|
|
10-14-2018, 01:25 PM
|
#3
|
Thinks s/he gets paid by the post
Join Date: Oct 2017
Location: Tellico Village
Posts: 2,607
|
Quote:
Originally Posted by Tiger8693
Have been listening to the Little Book of Common Sense Investing 2017 Edition (one of several recommended on another thread), and the last chapter I listened to was pretty pessimistic on the next decade for stocks and bonds return (60/40). Based on RTM, etc, he expects conservatively about 3.6% return after all fees, inflation etc.
I sure hope he is wrong.
|
His opinion is shared by many in the financial business. But the phrase"nobody knows nuthin" also applies here.
I was lucky enough to meet "Jack" Bogle and he would also tell you your guess is as good as the next.
Better to plan on pessimism than be overly optimistic.
__________________
Retired May 13th(Friday) 2016 at age 61.
|
|
|
10-14-2018, 01:36 PM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
|
I'll be more than happy with 3.6% real return over the next decade. After this big run up, ecstatic, in fact.
You do know it's possible to go negative for a decade? Like, oh, that far distant time like 2000-2009? Or the 1970's? Or any time in the future?
Bring it on! Real return of 3.6% is party time!
-ERD50
|
|
|
10-14-2018, 01:52 PM
|
#5
|
Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,586
|
Depends on the volatility. A real return of 3.6% can be fine with low volatility. High volatility could sharply reduce the effective return.
|
|
|
10-14-2018, 02:26 PM
|
#6
|
Thinks s/he gets paid by the post
Join Date: Feb 2013
Location: Toronto
Posts: 3,320
|
I'd be very ok with 3.6% net after inflation and fees going forward. Especially given the massive run up over the last 9 years. If I were retiring right now and was close to the edge I'd be very concerned about sequence of returns rearing its ugly head. Have met Mr Bogle on a few occasions and have thanked him each time. He always couches any opinion he gives with a caution about opinions.
|
|
|
10-14-2018, 02:42 PM
|
#7
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2016
Posts: 9,422
|
Quote:
Originally Posted by ERD50
I'll be more than happy with 3.6% real return over the next decade. After this big run up, ecstatic, in fact.
You do know it's possible to go negative for a decade? Like, oh, that far distant time like 2000-2009? Or the 1970's? Or any time in the future?
Bring it on! Real return of 3.6% is party time!
-ERD50
|
I also would be happy with 3.6% return each year for the next decade.
|
|
|
10-14-2018, 02:43 PM
|
#8
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,232
|
Quote:
Originally Posted by street
I also would be happy with 3.6% return.
|
+2
__________________
TGIM
|
|
|
10-14-2018, 02:49 PM
|
#9
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,671
|
I have usually been happy with what the market delivers to me over the long term. Not too much. Not too little. Goldie Locks?
__________________
Part-Owner of Texas
Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx
In dire need of: faster horses, younger woman, older whiskey, more money.
|
|
|
10-14-2018, 02:51 PM
|
#10
|
Thinks s/he gets paid by the post
Join Date: Jun 2013
Location: Bonita (San Diego)
Posts: 1,795
|
Inflation is at least 2%, probably approaching 3%. Fees, 0.25% or less at VG, but up to 1% or more for many.
Say 2.25% + 3.6% = 5.85% return. Who knows if he included dividends in that, with S&P 500 dividend about 1.8% in 2017 = more than 7.5%. What's the big deal?
__________________
"So we beat to our own drummer in the sun;
We ask for nobody's permission to run.
I just wanna live in a world like that;
Now I'm gonna live in a world like that!" - World Like That, O.A.R.
|
|
|
10-14-2018, 02:56 PM
|
#11
|
Full time employment: Posting here.
Join Date: Jun 2018
Location: Brisbane
Posts: 855
|
Quote:
Originally Posted by MichaelB
Depends on the volatility. A real return of 3.6% can be fine with low volatility. High volatility could sharply reduce the effective return.
|
4% ( nett dividend and interest ) return i can live with but i see the trend towards inflation and would prefer 6% plus .
i am planning to resist any major sell-down of my portfolio ( except the inverse index ETFs held as a liquidity buffer )
so volatility is less relevant to me ( a big drop might be a buying opportunity )
__________________
i hold the Australian listed versions of AU ( Anglo Ashanti ) , BHP , and JHG .
You must learn from the mistakes of others. You can't possibly live long enough to make them all yourself.
Samuel Levenson
|
|
|
10-14-2018, 03:03 PM
|
#12
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
|
Quote:
Originally Posted by ERD50
I'll be more than happy with 3.6% real return over the next decade. After this big run up, ecstatic, in fact.
You do know it's possible to go negative for a decade? Like, oh, that far distant time like 2000-2009? Or the 1970's? Or any time in the future?
Bring it on! Real return of 3.6% is party time!
-ERD50
|
+1000
But did Bogle change his mind recently, or did he readjust his 2017 outlook based on some new info?
As reported in another thread, Bogle recently said his expectation was 2%/year, and that was with dividend, and after inflation.
See: http://www.early-retirement.org/foru...sts-94174.html.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
|
|
|
10-14-2018, 03:10 PM
|
#13
|
Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
|
He tries to set our expectations. He’s been predicting this for a while.
|
|
|
10-14-2018, 03:26 PM
|
#14
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
|
Quote:
Originally Posted by street
I also would be happy with 3.6% return each year for the next decade.
|
I'd even be happy (not ecstatic) with 3.6% real return for the entire 10 year period.
That means my portfolio did better than inflation. Much better than being negative with respect to inflation, or just plain negative.
Heck, the past 10 years, VTI (Total Market) is up ~ 113% inflation adjusted, and a 50-50 (with BND) is up ~ 69% inflation adjusted. Can't expect gravy all the time.
edit/add - the previous decade, 1998-2008, saw S&P500 down 15% wrt inflation. So yeah, I'll take +3.6%.
-ERD50
|
|
|
10-14-2018, 03:47 PM
|
#15
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
|
Quote:
Originally Posted by MichaelB
Depends on the volatility. A real return of 3.6% can be fine with low volatility. High volatility could sharply reduce the effective return.
|
I'm pretty certain that Bogle is talking 3.6% real net (CAGR) after 10 years. Not the 3.6% 'simple average annual' number that some other huckster that will go un-named had mentioned.
-ERD50
|
|
|
10-14-2018, 03:48 PM
|
#16
|
Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,474
|
Oh wow!!! When I saw the title of this thread, I thought that John Bogle had passed away. He IS 89 years old, after all. Whew, so glad this isn't an R.I.P. thread.
As for market returns, 3.6% *after* inflation? I can't imagine anyone having a problem with returns like that! Let's see; if this year's inflation is 2.8%, then that would be around 6.4%? Sounds pretty good!
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
|
|
|
10-14-2018, 03:54 PM
|
#17
|
Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,474
|
Quote:
Originally Posted by 6miths
I'd be very ok with 3.6% net after inflation and fees going forward. Especially given the massive run up over the last 9 years. If I were retiring right now and was close to the edge I'd be very concerned about sequence of returns rearing its ugly head.
|
+1
I don't think this is a good time to be retiring close to the edge.
It was simply amazing to me to see for myself what the sequence of returns did for those of us who retired in 2008-2009. Unfortunately the reverse is likely to be true for those retiring at any time when the bull market may be near its peak.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
|
|
|
10-14-2018, 04:00 PM
|
#18
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,808
|
That 3.6% real return is based on buy-hold. We could have great returns in the next couple of years and then a very bad year. Or some other equally volatile scenario.
I think some very modest market timing might be in order should key indicators of the past for a recessionary business slowdown go red. Items like the Fed leading index going down, the unemployment rate ticking upwards, a negative sloped yield curve, etc. None of this is true of the present.
|
|
|
10-14-2018, 04:07 PM
|
#19
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
|
Quote:
Originally Posted by ERD50
I'd even be happy (not ecstatic) with 3.6% real return for the entire 10 year period.
That means my portfolio did better than inflation. Much better than being negative with respect to inflation, or just plain negative.
Heck, the past 10 years, VTI (Total Market) is up ~ 113% inflation adjusted, and a 50-50 (with BND) is up ~ 69% inflation adjusted. Can't expect gravy all the time.
edit/add - the previous decade, 1998-2008, saw S&P500 down 15% wrt inflation. So yeah, I'll take +3.6%.
-ERD50
|
Whoa! 3.6% for the entire decade means 0.35% annualized for each year.
I guess I am right to write covered calls whenever I can. I can get a couple of percents a year by doing that.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
|
|
|
10-14-2018, 04:08 PM
|
#20
|
Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Chicago
Posts: 1,154
|
W2R, im in love with your Avatar....or is that you...
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|