Bogle Sees Investment Value in Bonds

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Look at the S&P -- -- Express Scripts will they came out today and said that an unsure unclear situation when it comes to high unemployment will hurt their numbers.

And specifically Cablevision loses interest and they -- in -- excuse my glasses of that financial impact from the hurricane.

Because a lot of homes were lost that we're Cablevision customers.

Well they say that there is going to be an impact on earnings and 2013 but we're watching those names reprisals -- back Jack Bogle of Vanguard Group founder Jack.

You know in the past you've told us at least in the past year that the commodity height.

And the dividend hike did not get you -- Does any of that ring true still argued billion you missed out on a couple of things -- what is your feeling about those two areas.

-- and I am I -- -- construct.

Long term investor and to make matters somewhat worse toward better.

But it is under consummate asset -- -- on heavily invested in bonds most -- -- municipal bond from my personal account.

And bond index funds and my pension account which is.

My largest single asset.

And that so I don't worry much about the short term fluctuations.

I'm not sure what you meant by the dividend question -- respect to commodities are very simple view of commodities.

They -- -- the ultimate in rank speculation.

And that is because and stocks.

The returns are supported by dividend yields and earnings growth and in bonds.

We return is protected by interest coupons.

But there is no such thing there's no internal rate of return as I expressed on commodities figure speculating you're buying at a price a hoping it can sell out of 2550 -- 100% more that is the hope.

And there's no there's no underlying investment value to a commodity so that may be fun to play with to watch the price go up and then and some people are actually.

You heard -- here is some people are actually gonna win but I think a lot -- by and high and buy low and sell hot but I think most people we're gonna do it the wrong time.

What I meant by the dividend question was that there's so many people were piling into high dividend yielding stocks.

Without looking at the fundamentals of the companies.

Well within the -- wanna be very careful about very high yielding stocks but normal income portfolio of of reasonable dividend paying -- say 3% compared to the markets return of 2% -- those dividends should be pretty well protected.

And over the long run dividends keep rising and rising and rising in fact what we saw in 20089.

Was the only big decline sort of 48% decline in the dividend on the S&P index is about the only significant decline we've had.

Since the Great Depression for dividends have a certain amount of stability.

And with a very low payouts -- -- a lot of earnings above those dividends.

Hiding dividends we'll continue to be very well protected as a group but I wouldn't try one company not not not -- life -- a diversified guy.

You know as we finish up its Election Day obviously there's this book that's been circulating around here -- bulls bears and the ballot box by Bob Dietrich.

And I looked at this and we had him on the show we thought it was very fascinating when it comes to investing money.

Under Democrats under Republicans we can put up on the screen that if you were to invest money under.

Republicans vs Democrats the market returns I guess that that's what they showed a political party being better for person's wallet the average annual stock market return during a Republican rule.

Was about half a percent the -- point 58 and the average annual stock market return with democratic leadership.

Was nine point 6%.

As are other factors weigh into that.

As well how I think -- I've looked at the data a little bit.

And what usually happens for reasons best known others is a returns earned by American business don't change all -- from one administration and other.

What happens for some reason there's by the time the Republicans get all out of office.

The price earnings multiples of PE ratios are relatively low and -- to the point where they -- the -- that they won't go up.

During the next four years the next eight years is quite high.

So it's basically the speculative returns that swings those two sets of Republican vs Democrat numbers I just don't see that.

Causal connection.

Between them these that would the stock market returns under one party as compared to the other party I don't know I don't know where to go from there.

I I I'd guess that if normalized ever think that both these same.

That bold statement.

Jack it's great to see you and I've never heard someone pronounced guru is a room but I'm going with the -- Uptick -- -- still were be very happy.

Thank you so much for joining us Jack Bogle the founder of Vanguard Group that of course.

Really the founder of the father of index funds good to see you thank you so much.

Thank you have a great -- with such as.

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Bogle Sees Investment Value in Bonds

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