There was a Portfolio Ponderings at Coffeehouse Investor on 4 June 2006 but has been replaced by a new article. It is a summary of John Bogle’s speech at The Money Show in May 2006. The old one did not get archived in http://www.kingcountyjournal.com as the other Portfolio Ponderings did usually. But I found it in Google cached page and posted it HERE.
Bogle, in a pointed presentation, offered up a compelling argument that future stock market returns are likely to be significantly less than long term averages
What happens if Bogle is correct in his analysis of future market returns? Investors are faced with two choices to address this challenge. You can seek out actively managed portfolios and bet the thin odds that your investments will outperform the market. Bogle puts your odds of winning this game at 9 percent or less. Alternatively, you can assure yourself that you will capture the entire return of this asset class through a low cost index fund, minus the minimal fees associated with these funds.
Or if you prefer graphs and charts, click on “Slides” below. You can also read the full speech in the link below.
What’s Ahead for Stocks and Bonds – And How to Earn Your Fair Share
The Money Show
May 15, 2006