The Jack Bogle Appreciation Curve

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commonsenseJack Bogle is rightfully respected and there are probably over a hundred mentions of his name on this site. His message of common sense, simple, low-cost investing continues to spread since he first opened the Vanguard 500 Index fund to the public in 1975. Yet, he still has to keep pounding his drum because there is so much other noise out there. Similar to the sketches of NYT journalist Carl Richards, I present to you what I call the Bogle Appreciation Curve.

boglecurve

The overall shape of this curve can probably be applied to any field where there are classic fundamentals and then a bunch of fancy stuff on top. It definitely applies to investing, where there is an insatiable desire for something newer, better, and more complex.

Beginner Investor. You’re just starting out, and you read some recommended business books. There’s the classic Bogle on Mutual Funds and the much shorter one called The Little Book of Common Sense Investing (which you picked) by Bogle that really made sense and sounded reasonable. You see why low-costs and passive investing are based on common sense and basic mathematics. You understand why you should avoid high-cost, high-turnover funds sold by brokers.

Investor Who “Knows Things”. You read more about investing, learning about correlations and factors and portfolio optimization. This stuff is pretty interesting! Historically, if I bought a nice slug of “small-cap value” stocks, a bit of commodities, a sprinkle of gold, I would have higher returns with less volatility? I’d do even better with a momentum-following strategy, and now there is a smart beta ETF that will do it for me? It seems so easy to do better than a “vanilla” portfolio.

Jack Bogle says “smart beta is dumb”. Hmm, maybe he’s just not with the modern times anymore.

Older, Humbled Investor. Well, that was exhausting. The historically optimal portfolio in 1990 wasn’t the same as the historically optimal portfolio in 2000, and that was again true in 2010 and will be again in 2020. I missed out on part of the 2008-2016 surge because people told me the market was overvalued due to CAPE and PE10 and many other metrics. If I had just stayed the course through it all, I’d have done pretty good. I think someone told me to keep it simple. Who was it? Oh yeah, Jack Bogle. I need to re-read his books.

You can also keep up with John C. Bogle’s media appearances on his personal website. The updates serve as a nice, regular dose of Bogle wisdom.

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Comments

  1. I liked this, and hope you don’t mind that I linked it on the Bogleheads site. Thanks for the wisdom!

  2. simplesimon says:

    This looks a lot like the chart that graphs children’s age to their view of their parents’ intelligence.

    Early childhood: parents know everything.
    Teenage years: parents know nothing.
    Post-college/adulthood: parents were right about everything.

  3. Ha! Having gone through the curve of this chart during my own investing learning curve that just happens to very closely have matched the lifespan of your blog, I can definitely relate to this. And that’s only a little short of a decade and a half! Will we appreciate Mr. Bogle even more as we continue to age?

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