Over the past decade, Morningstar has been fortunate to have the opportunity to interview Bogle and gain his insights into investing. Below are a few of his insights with links to the interviews.
On why he never owned non-U.S. stocks
I'm just a great believer in a U.S. portfolio because we're the most entrepreneurial nation, we've got the soundest institutions, financial and otherwise, or have had in the past, governance is pretty solid, in the past at least, and a well-diversified economy.
For U.S. corporations, about half of their revenues and half of their earnings come from abroad anyway. It's not as if we're America first or America only. The entire world economy is integrated around many, many countries trading with many, many other countries. I do not think you need to add international.
Many of these foreign nations, particularly emerging markets nations--which are, I think, around 20% of the non-U.S. index--are very risky, very interest-rate sensitive, governmentally not as strong or maybe capable of tipping over rather easily.
I have 0% in non-U.S. I say you don't need to have non-U.S., but if you do, limit it to 20%.
October 2018
On buy and hold
The focus is always on what's done well. Our neighbor is doing better. He owned gold or he owned growth stocks, or value stocks did nothing. And the moment the temptation gets to its highest level, that's the moment when people start to think “I've got to change now”, and that's the worst time to do it.
I'm a "stay the course" person.
Buy and hold is eternal. There is no way around it. First, think about it this way. As a group, we investors buy and hold. All of us together own the entire stock market and we hold it.
We are trading back and forth within the market with each other, and we are each trying to gain an advantage over somebody else. It is a market system that pits one investor against another. But as a group we are buy and hold investors.
But I do think a very important point is what do you mean when you say "buy and hold"? I am a buy and holder, but that doesn't mean I buy and hold the stock market.
I buy and hold the stock market and the bond market in whatever proportions appeal to me. And for me, I don't change my allocation very much, but for me, holding roughly ... the percentage in bonds that my age is, which is getting a little bit on the old side, means I am very conservative, buying and holding approximately 80% of my assets in bonds and buying and holding approximately 20% in stocks.
That is a sensible theory. It is an explainable theory, but we don't know what people mean when they say "buy and hold."
October 2011 and July 2009
On market ups and downs
The market is going to do its rotation. Stocks are going to get overvalued. Stocks are going to get undervalued, and when somebody figures out that they're undervalued and buys them, it's a great opportunity. But don't forget he bought them from somebody who sold them.
There's no way to beat the market overall. There just isn't because we're all trading with one another.
I think people have lost sight of the fact that a sharp market decline is--of course it's bad for sellers, but it's good for buyers. Since the stock market is the interaction of sellers and buyers, it's always good for somebody.
October 2017 and October 2008
