Ever hear of Vanguard? Of course you have. It is a very well-known respected mutual fund company founded by Jack Bogle, now 81 years young! In his latest book, Mr. Bogle warns about the "perils of numeracy." Even though investors have earned about 9% a year in the stock market in the last century, much of that from dividend income and earnings growth, there's more to that story than meets the eye.
Trading costs, sales charges and investment fees as well as TAXES, eat a large portion of the return. In fact, Mr. Bogle says that the number is as much as 75%, before taxes!
Well known as a guru in the investment world, Mr. Bogle says, "Numbers don't necessarily repeat themselves, and the person who presents the number to you may have a vested interest," In his ninth book, "Don't Count on It! Reflections on Investment Illusions, Capitalism, Mutual Funds, Indexing, Entrepreneurship, Idealism and Heroes," which is a collection of his writings over the last decade.
An interview with Mark Jewell of the Associated Press asks Bogle, "What worries you most about the markets?" He responds, "I've never seen a more difficult time to invest, with the specter of these enormous deficits hanging over us, and with the global economy teetering a great deal more than people think it is. China poses special risks, with a huge construction boom that can't go on forever.
When asked "What's your current outlook on the stock market?" He answers, "The market is at a relatively fair value now but may be a bit overvalued for the long term. But I will no more predict what will happen in 2011 than fly to the moon. Anybody who goes into the market to make money specifically in 2011 should either be spanked or have their head examined. It's just too short of a period to predict, and it's a crapshoot."
"Jack" Bogle at least tell it like it is. I really respect the guy.
-Lady Fi.
Kathy
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