Comments by "JP 72" (@739jep) on "Jack Bogle: Should you buy Index Funds at All-Time Highs?" video.

  1. Buying the worst performing companies is a feature of index investing not a bug. Individual stocks have very positively skewed returns. Only 4% of the total market has been responsible for the markets return in excess of t-bill returns. If markets price assets efficiently then it will be very difficult to find those companies before they make those returns. This is evident in the severe underperformance of active funds compared to passive investing over the long term. Uptrending industries? The sector composition of the S&P 500 has changed dramatically over the years. For example in the 50s chemical , auto , steel and oil dominated the index , now it is tech and healthcare. If you had invested in just the biggest industries and held them from the time of the S&p 500s inception you would have outperformed the index by more than 1% for the next 50 years. Take rail as another example. From 1900 to 2019 rail companies went from making up 63% of the total us market to less than 1%. It is one of the best examples of a declining industry. During that time it outperformed both the total us market as well road transportation stocks and air transportations stocks (two uptrending industries during that time). Again , having to buy the worst performing companies in the index is a feature not a bug. Anyone can see what stocks did well yesterday, but nobody knows which stocks will do well in the future. It’s not just about how much profit companies will make , but how much we pay for those future profits today.
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  2.  @DonBrowningRacing  I prefer not to get too specific about my work as I’m don’t think it adds much to the conversation but I will say I have experience in that industry. Indeed to you I’m really just a random guy on the Internet who could be lying anyways 😂 The academic literature and empirical evidence is what carries the most weight in my view and there are certainly many financial advisers who advise in a manner contradictory to what these sources tell us. Regardless , congratulations on your success, I hope you have many more years of positive results 👍 Edit: but if I were to give a brief overview of where I stand. I am certainly not of the trading tribe. I’m more a fan of long term passive investing , eliminating market timing and stock picking, keeping costs low, and if appropriate chasing higher returns simply by gaining extra exposure to known risk factors while remaining as diversified as possible.
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  3. That’s due to the positive skewness of stock returns and our knowledge that systematic risk is a compensated risk and non systematic risk is not. Edit: if you were maximally unlucky and only invested at every all time high in the market for the last 100 years you would still be doing pretty good. Not the same case with individual stocks.
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  4.  @DonBrowningRacing  i might be betraying my naivety but I’m not sure what the Old Course is so I’m guessing I haven’t 😂 Sounds like you’ve lived quite a life so far!
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  5.  @kbro7484  id bet that his advice would continue to be ‘stay the course.’
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  6. Prices are impacted by trading. It is true that etfs make up a big portion of invested money but only a small portion of trading. As it stands , small cap stocks have actually outperformed the S&p 500 over the long term.
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  7. Statistically speaking the market is no more likely to crash at an all time high than any other price level.
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  8. Most found it easy enough to realise he’s talking about index tracking etfs. The insignificant differences between index funds or index tracking etfs are not relevant for the main point of this video.
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  9. Not sure where you got those numbers , but they don’t seem close to being correct. At any rate , picking a moment in time where markets were at all time high where we know in hindsight that there was a period of very low returns following them is data mining. There are plenty of other examples of markets being at all time highs that were followed by periods of substantial growth as well. Time in the market beats timing the market.
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  10.  @gsards  and had you invested at the peak in 2007 you would have made about 8.4% per annum since then.
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