Is diversification dead?

Print Friendly

Recent violent swings in the equity markets – more down than up – have spawned familiar rallying cries from every corner of the investing world, including “Diversification is Dead!” and “Buy and Hold is Obsolete!”

Is it really time to throw out the fundamental tenets of passive investing? John Bogle says No.

Amid the chaos, we welcome the perspective of Bogle, the inventor of the first (and largest) index mutual fund – Vanguard’s S&P 500 index. Having lived through the worst market environments of the last eight decades, and the best, this investing icon has a calm, multi-generational viewpoint that provides context easily forgotten in the fog of volatile markets.

This Wall Street Journal article explores Bogle’s reactions to what he sees going on in today’s markets (as well as an interesting video interview.) As usual, Bogle is forceful and unapologetic in rejecting the idea that investors are better off picking stocks for short-term gains than holding a diversified portfolio for the long term.  Read the article here.

And here’s another Osbon Capital piece on Bogle from mid-2009.

 


This article may include forward-looking statements. All statements other than statements of historical fact are forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”). Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Various factors could cause actual results or performance to differ materially from those discussed in such forward-looking statements.

Nothing in this article is intended to be or should be construed as individualized investment advice. All content is of a general nature. Individual investors should consult their investment adviser, accountant, and/or attorney for specifically tailored advice.

Any references to third-party data or opinions are listed for informational purposes only and have not been verified for accuracy by the Adviser. Adviser does not endorse the statements, services or performance of any third-party vendor without specifically assessing the suitability of a third-party to a client’s or a prospective client’s needs and objectives.

 

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!