Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
Login My Member Benefits Archives Research Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    ×
  • Subscribe
Enter stock ticker or keyword
×
5 Ways to Beat the Fed (and Crush Inflation)
Twitter
Tags: Trading Strategies

Why I'll Beat This Legendary Investor's Returns

John Bogle is good... but I'll still crush his profits out to 2027

By Tim Melvin, Special Situation Strategist, Money Morning • November 9, 2017

View Comments

Start the conversation

Comment on This Story Click here to cancel reply.

Or to contact Money Morning Customer Service, click here.

Your email address will not be published. Required fields are marked *

Some HTML is OK

If you're a huge fan of making unreasonably large piles of money, like me, or a self-described "Boglehead," you'll know that the legendary investor John C. "Jack" Bogle, of Vanguard Group, recently released his expected returns forecast, with extensive commentary, for the next decade.

Bogle, of course, has been doing these forecasts and commentaries for years, and it has to be said that he's far more accurate than many financial crystal-ball-gazers out there.

Here's his secret: Bogle takes the current dividend yield, factors in a growth estimate for earnings, and measures what he calls "speculative return."

If the price-to-earnings (P/E) ratio goes up, there's a positive expected return. On the other hand, if Bogle thinks the ratio will compress over the next decade, he'll call a negative speculative return that he subtracts from the earnings and dividend calculator.

It works pretty well. Now, he doesn't necessarily nail returns precisely to the last percentage point, but Bogle does have a knack for conveying the prevailing bullish or bearish conditions over the next decade.

But here's the thing: As much as I respect Bogle's experience and accurate track record, we've got a big difference of opinion.

Sign up for SMS so you never miss special events, exclusive offers, and weekly bonus trades.

You see, I think his return expectations, which I'll show you in a minute, are too low.

Essentially, Bogle and the "Boglehead" investors following along are settling for less - far less - than the unreasonable returns possible in a market like this.

Let me show you what kind of profits are possible - and how you can get at them...

Why Would Anyone Settle for Returns Like This?

greatest investorsIn this year's forecast, Bogle calls for 4% returns in stocks and 3% in bonds over the next decade.

I'll tell you, that's very disconcerting, given that his 1999 forecast was for 5% stock returns. It means his expectations are lower now than they were back then.

So, if Bogle is anywhere near accurate, a blended "classic" portfolio of 60% stocks and 40% bonds is going to average about 3.6% a year.

Market-Crushing Returns: One recent recommendation closed out for a 995% win. Click here to learn more...

Trouble is, it's 2017: Valuations are higher, the economy is growing very slowly, and interest rates are about as low as they can go.

To put it mildly, that's not a favorable starting point for the average investor.

Now, here's where the index-loving Bogleheads and I part company.

Join the conversation. Click here to jump to comments…

Tim MelvinTim Melvin

About the Author

Browse Tim's articles | View Tim's research services

Tim Melvin is an unlikely investment expert by any measure. Raised in the "projects" of Baltimore by a single mother, he never attended college and started out as a door-to-door vacuum salesman. But he knew the real money was in the stock market, so he set sights on investing - and by sheer force of determination, he eventually became a financial advisor to millionaires. Today, after 30 years of managing money for some of the wealthiest people in the world, he draws on his experience to help investors find "unreasonably good" bargain stocks, multiply profits, and build their nest eggs. Tim tirelessly works to find overlooked "hidden gems" in the stock market, drawing on the research of legendary investors like Benjamin Graham, Walter Schloss, and Marty Whitman. He has written and lectured extensively on the markets, with work appearing on Benzinga, Real Money, Daily Speculations, and more. He has published several books in the "Little Book of" Investment Series and a "Junior Chamber Course" geared towards young adults that teaches Graham's principles and techniques to a new generation of investors. Today, he serves as the Special Situations Strategist at Money Morning and the editor of Peak Yield Investor.

… Read full bio

Login
guest
guest
2 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Francoise
Francoise
5 years ago

I would like to learn but would prefer to receive pdf because I do not have continuous free Wifi where I am. I am allowed only 5 megabites a month on my phone.

0
Reply
ron dominguez
ron dominguez
5 years ago

where is the rest of this article

0
Reply


Latest News

May 27, 2023 • By Garrett Baldwin

postcards from the florida republic - may 27

May 26, 2023 • By Garrett Baldwin

Here's Your (Surprising) Best Bet in a U.S. Default

May 26, 2023 • By Shah Gilani

earnings
The Five Things You Need to Know Before Buying Any Stock
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Profit Takeover This Is VWAP Penny Hawk Trading Today Midday Momentum Pump Up the Close
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Night Trader Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Extreme Profit Hunters Profit Revolution Warlock's World Quantum Data Profits Live Trading Alliance Trade The Close Inside Money Trader Expiration Trader Flashpoint Trader Darknet Hyper Momentum Trader Alpha Accelerators Weekly Profit Cycles Brutus Alerts Resource Traders Alliance

© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell or Share My Personal Information

wpDiscuz