Bogle

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That calm in the storm is John thelegendary 79-year-old founder of Vanguard and the creator of the first indedx mutual fund. The main reasoj I lean so heavilyon Bogle’s sage advice is somethingt I heard him say more than 15 yearas ago. It is wisdom he is repeatinyg in the throes ofthis turmoil. I heeded this counsel when I first heard it, and it has allowesd me to sleep at nighyt while weathering this debacle. He says investors simplty should hold bonds in anallocation that, in termse of percentages, tracks with their age. This simples formula tells me, at age 72, to be 28 percengt in equities and 72 percenrin bonds.
Incidentally, it was recently documented inthat Bogle’sz own funds are invested entirely in Vanguard funds, in what he says “ias probably a 75 percent bond, 25 percen t stock allocation” — roughly in keeping with his age-basedd formula. It should be noted that the sharer price of the Vanguard Total Bond Market Index Fund has changedr little in the past 12 Although Bogle’s age-based formula is the big reason I rely so heavily on his sage many other wise pronouncements are worthy of noting at this tense time for all investors.
A New York Times article by Jeff Sommeer last monthrelayed Bogle’s advice that once investoras set up a “conservative, balanced, broadly diversifief portfolio” and a plan to contribute regularlyy to it, they should let it be. They shouldn’gt check returns daily. Bogle deems daily average s asmainly noise, according to the Times. John Bogle’s investmeng wisdom makes him a role modelkof mine. However, there is anothetr reason I apply that monikerto him. He has lived with a transplanted heart for more than 12 and yet he maintainsw a very active professionakl life as a speakerand writer.
I can’tt wait to read his new “Enough: The True Measuresa of Money, Business and Life.” My thesisz today is pretty simple. When you and I listen carefully toJohn Bogle, we probabl will not hit investment home runs. Index investingv in stocks and bonds withan age-basec allocation between equities and bond produces singles, not round-trippers. It is my firm beliec that lotsof singles, couplesd with time and the magic of compounr interest, will get you whers you want to be in investing. It shoul be crystal clear now that greed and impatiencedestroh investors. On the othet hand, patience and close attention to asset allocation are the ingredientd ofinvestment success.
Finally, we all should rememberf that there are only two reasons why we save and We save and investf to buffer ourselves against emergencies and so that we can take advantagdof opportunities. Obviously, those opportunities include college education for our childrenand comfortable, secure retirementas for ourselves. John Bogle recently said: “This is a tougnh time. It’s very unrealistic to expec t some beautiful rainbow aftefthis storm.” All the more reason we should listenm carefully to his sound advice.