Regarding one and five year time horizon expectations, Bogle's take on reversion mentioned the "...inevitably uncertain world of investing..." and "...no one knows what future returns the financial markets will provide." His 1998 position suggested potential risks, remaining invested depending on horizon, and "...to emphasize the incredible power of compounding over an extended period of years." He often recommended bonds with stocks, and he suggested human fallibility or "...greed at market highs and toward fear at market lows." Kahneman also suggested "...an exclusive concern with the long term may be prescriptively sterile, because the long term is not where life is lived." Cullen Roche has similarly talked about 10% returns from the S&P 500, yet he emphasized how it comes with yearly volatility, which tends to bring into question how stock market momentum might play out in any particular year.What will the market do next year? Galton and Kahneman would say base your behavior on the long-term average (10% nominal). Next five years? 10%. Next 20 years? 10% Notice that regression to the mean fits in perfectly with passive indexing and "stay the course", and with Bogle's "nobody knows nothin'" statement.
https://johncbogle.com/wordpress/wp-con ... t-1-98.pdf
https://disciplinefunds.com/2024/08/30/ ... d-returns/
Statistics: Posted by alluringreality — Thu Oct 24, 2024 11:09 pm — Replies 35 — Views 1730
