• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Optimized Portfolio

Investing and Personal Finance

  • Start Here
  • Investing 101
    • Beginners Start Here – 10 Steps To Start Building Wealth
    • What Is the Stock Market? How It Works & How to Invest in It
    • How To Invest in an Index Fund – The Best Index Funds
    • Portfolio Asset Allocation by Age
    • How To Invest Your Emergency Fund
    • Portfolio Diversification – How To Diversify Your Portfolio
    • Dollar Cost Averaging vs. Lump Sum Investing (DCA vs. LSI)
    • How To Invest Your HSA (Health Savings Account)
    • Factor Investing and Factor ETFs – The Ultimate Guide
    • more…
  • Lazy Portfolios
    • All Weather Portfolio
    • Bogleheads 3 Fund Portfolio
    • HEDGEFUNDIE’s Excellent Adventure
    • Warren Buffett Portfolio
    • Golden Butterfly Portfolio
    • Paul Merriman Ultimate Buy and Hold Portfolio
    • Ben Felix Model Portfolio
    • Permanent Portfolio
    • David Swensen Portfolio
    • 60/40 Portfolio
    • more…
  • Funds
    • VOO vs. VTI – Vanguard S&P 500 or Total Stock Market ETF?
    • The 7 Best International ETFs
    • The 8 Best Small Cap ETFs (4 From Vanguard)
    • The 5 Best REIT ETFs
    • The 5 Best EV ETFs – Electric Vehicles ETFs
    • VIG vs. VYM – Comparing Vanguard’s 2 Popular Dividend ETF’s
    • The Best Vanguard Dividend Funds – 4 Popular ETFs
    • The 5 Best Tech ETFs
    • The 7 Best Small Cap Value ETFs
    • The 6 Best ETFs for Taxable Accounts
    • The 5 Best Emerging Markets ETFs (1 From Vanguard) for 2023
    • more…
  • Leverage
    • What Is a Leveraged ETF and How Do They Work?
    • How To Beat the Market Using Leverage and Index Investing
    • The 9 Best Leveraged ETFs
    • Hedgefundie’s Excellent Adventure
    • Leveraged All Weather Portfolio
    • Leveraged Permanent Portfolio
    • Leveraged Golden Butterfly Portfolio
    • NTSX – Review and Summary
    • TQQQ – Is It A Good Investment?
    • PSLDX – A Review
    • SWAN – A Review
    • RPAR Risk Parity ETF Review
    • more…
  • Dividends
    • The Best M1 Finance Dividend Pie
    • The 11 Best Dividend ETFs
    • The Best Vanguard Dividend Funds – 4 Popular ETFs
    • VIG vs. VYM – Comparing Vanguard’s 2 Popular Dividend ETF’s
    • 8 Reasons Why I’m Not a Dividend Income Investor
    • QYLD – A Harsh Review
    • more…
  • Brokers
    • The 5 Best Stock Brokers
    • The 4 Best Investing Apps
    • M1 Finance Review
    • Brokers with the Lowest Margin Rates
    • M1 Finance vs. Fidelity
    • M1 Finance vs. Vanguard
    • Webull vs. Robinhood
    • Stash vs. Robinhood
    • M1 Borrow Review (How M1’s Margin Loan Works)
    • more…
  • Retirement
    • The 10 Best ETFs for Retirement Portfolios in 2023
    • The 4% Rule for Retirement Withdrawal Rate – A Revisitation
    • Sequence of Return Risk in Retirement Explained
    • Traditional IRA Explained
    • Roth IRA Explained
    • 401k vs. Roth IRA
    • Roth IRA vs. Traditional IRA
    • Backdoor Roth IRA Explained
    • more…
  • My Toolbox

Jack Bogle Was Wrong About These 3 Things

Last Updated: May 17, 2023 2 Comments – 4 min. read

Jack Bogle founded Vanguard and was considered the “father of index investing,” but he did have a few takes on things that weren't quite right.

Disclosure:  Some of the links on this page are referral links. At no additional cost to you, if you choose to make a purchase or sign up for a service after clicking through those links, I may receive a small commission. This allows me to continue producing high-quality content on this site and pays for the occasional cup of coffee. I have first-hand experience with every product or service I recommend, and I recommend them because I genuinely believe they are useful, not because of the commission I may get. Read more here.


Contents

  • Video
  • Introduction – Jack Bogle
  • ETFs
  • Corporate Bonds
  • International Stocks
  • Conclusion

Video

Prefer video? Watch it here:

Introduction – Jack Bogle

Humans have a tendency to latch onto specific people and believe everything they say is true without assessing the content of each piece of information or advice on its own merits. I explained in another post that this is known as authority bias. Investors tend to do this with figures like Warren Buffett and Ray Dalio, and Bogleheads specifically do this with the late Jack Bogle. Not everything one person says should be taken as gospel, including things that I say.

One could make the argument that Jack Bogle did more for retail investors than anyone else in history. He is one of the most well-known figures in the investing world. He founded the shareholder-owned brokerage firm Vanguard and constantly fought for lower fees and the power of things like passive index investing and diversification.

jack bogle
John “Jack” Bogle

Bogle definitely espoused some fantastic ideas and very quotable pieces of sage advice over the years, and many of his followers, called Bogleheads, adhere to those ideas with an almost cult-like idealogical rigidity. But there are several areas where it may be wise to deviate from Bogle's advice.

ETFs

Bogle advocated for index investing by buying and holding a mutual fund. Sounds innocent enough. But when the first ETF (Exchange Traded Fund) launched in 1993, he felt the vehicle inherently promoted more trading, and trading is staunchly anti-Boglehead due to higher fees and the folly of market timing.

He was also concerned that intraday pricing of ETFs – as opposed to the guaranteed NAV for mutual funds at the close of trading – would always lead to them being sold at a premium to retail investors, and suggested that investors didn't need that intraday liquidity anyway.

In short, Bogle felt that ETFs were a poor product and were just a way for exchanges to extract fees from investors. In fairness, Bogle's concerns are valid for investor behavior; they just weren't inherent properties of the ETF as a product as he proposed. In any case, even though his theoretical fears never really became a reality, Bogle never changed his anti-ETF stance, and even felt that Vanguard should have never offered them.

Corporate Bonds

Bogle famously commented many times that the Barclays Aggregate Bond Index – which most total bond market funds track – “overemphasizes” treasury bonds. He seemed to prefer corporate bonds and suggested that a fund like Vanguard's BND – which only has about 25% corporate bonds – should contain more of them.

Bogle liked corporates for their higher yields compared to treasuries. And that's true. But the reason it's true is also the reason I don't own or suggest owning corporate bonds – they're riskier.

I explained in a separate post that corporate bonds are inherently much more correlated with stocks, have greater tax consequences, and tend to fall at the precise times when we need them most. For these reasons, historically, an equities portfolio with treasury bonds generated higher general and risk-adjusted returns than one using corporate bonds. This is also why I don't use total bond market funds and prefer to use treasury bond funds.

For the investor who owns any allocation to stocks, I see no reason to own corporate bonds. Yield and a greater risk/reward profile within fixed income assets should only be concerns if the portfolio for some reason is 100% bonds.

International Stocks

Something I've mentioned many times around here is the idea of global diversification. Unfortunately Bogle's championing of passive index investing stopped at U.S. borders. Bogle famously only invested in the U.S. stock market and didn't feel the need or see the reason to own international stocks.

Make no mistake that this is very much an active choice, which is ironic for someone who proposed buying “everything.” Bogle had a few explicit reasons for avoiding international stocks.

Bogle's first reason for solely sticking with the U.S. is that “international investing involves extra risk, ranging from currency risk and economic risk to societal instability risk.” This isn't necessarily a bad thing. These are the unique risks that we're expecting to be compensated for and that are responsible for lower correlations to U.S. stocks. These are precisely that risks that have caused Emerging Markets to be the highest performing corner of the global market historically.

Secondly, Bogle commented that international stocks move close enough with U.S. stocks that they don't offer much diversification. This is arguably true of Developed Markets, but is demonstrably false for Emerging Markets. I've explained elsewhere that Emerging Markets offer unique risks and a reliably lower correlation to the U.S. market. Any purveyor of market history will know Emerging Markets have proved a useful component in portfolios over most time periods.

The last main component of Bogle's US-centric argument is the assumption that the United States leads the globe in productivity and economic output, ergo its stock market will outperform. There are a couple problems with this assumption.

First, GDP and stock market returns have been negatively correlated historically, so the idea is based on a logical fallacy. Emerging Markets stocks have beaten U.S. stocks historically, for example. Similarly, Bogle always noted, as many do, that large U.S. companies get revenue from abroad, but this doesn't really hold any weight. A stock's market risk component will move with its country's stock market.

Secondly, many subscribe to this US-only idea due to recency bias. Zooming out, there are plenty of extended periods historically where international stocks outperformed U.S. stocks, and where a global portfolio had higher general and risk-adjusted returns than a U.S. portfolio. In fact, recent U.S. outperformance means lower future expected returns – not higher – compared to international markets.

The point is that sensible investors must acknowledge that the future is unknowable and invest accordingly, which in my opinion means truly owning everything. This is where the famous “VT and chill” mantra comes from.

I went into the merits of international diversification in even more detail in a separate post here if you're interested.

Conclusion

So to recap, Jack Bogle was one of the greatest minds in investing, but ETFs are fine, treasury bonds should probably be preferable alongside stocks to corporate bonds, and it's likely wise to invest globally in stocks.

What do you think of these ideas? Let me know in the comments.


Disclaimer:  While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a research report. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. I mention M1 Finance a lot around here. M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. Hypothetical examples used, such as historical backtests, do not reflect any specific investments, are for illustrative purposes only, and should not be considered an offer to buy or sell any products. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.

m1

Are you nearing or in retirement? Use my link here to get a free holistic financial plan and to take advantage of 25% exclusive savings on financial planning and wealth management services from fiduciary advisors at Retirable to manage your savings, spend smarter, and navigate key decisions.

retirement peace of mind

Related Posts

  • 3 Best Preferred Stock ETFs & Why You Should Avoid Them (2025)
  • Motif Investing Alternatives – Consider M1 Finance
  • What Is the Stock Market? How It Works & How to Invest in It
  • QQQ vs. SPY & VOO – NASDAQ 100 vs. the S&P 500
  • The 7 Best Ecommerce ETFs for Online Shopping Stocks in 2025

About John Williamson, APMA®

Analytical data nerd, investing enthusiast, fintech consultant, Boglehead, and Oxford comma advocate. I'm not a big fan of social media, but you can find me on LinkedIn and Reddit.

Reader Interactions

Comments

  1. PX says

    February 8, 2024 at 9:49 am

    While no one’s perfect, it’s arguable that Bogle was right on all three aspects but especially so on international investing.

    First, the fees on international funds or commissions on such individual securities are significantly higher than their U.S.-only counterparts.

    Second, as many have noted, international diversification works until the moment an investor “needs” it; e.g. Financial Panic of 2008-9, COVID pandemic, etc.

    Third, many non-U.S. markets, especially those in developing countries, have economic sectors that are over-represented. Many of these markets are commodities-related. One can counter that energy prices affect U.S. equity markets though the counter to that is their effect is short-term and the dynamism of the U.S. economy allows for adjustments and substitutes, e.g. fracking, shale oil. sustainable energy tech, amongst other solutions.

    Fourth, the historical data on international and specifically emerging markets outperforming U.S. markets is often an apples to oranges comparison. Most of these studies use the S&P500 as the comparative U.S. benchmark, which has a large cap bias. Most of the non-U.S. benchmarks’ components are relatively small-cap and even micro-cap stocks. When compared to, say, the Russell 2000 index, even the MSCI Emerging Markets index falls short–far short–even before fund fees, which are much lower for the former.

    Fifth, though it may be controversial, it’s a reality that investors should be aware that the 20th century demonstrated that financial markets and capitalism aren’t embraced everywhere in the world. Czarist Russia and pre-revolution China and Cuba, amongst many others, once had active stock and bond trading markets. What happened to their investors leads to a cautionary dictum: caveat emptor.

    Finally, even Benjamin Graham, long preceding J. Bogle and the revolutions noted above, counseled investors against investing in even most foreign sovereign credits, let alone their stock issues.

    J. Bogle sounded as contrarian taking a stand against Americans investing in international markets as when he was evangelizing index funds. He wasn’t the first professional however to hold that view. So why do so many others advocate “international diversification”? Academia and commissioned sales with fatter margins. Caveat emptor.

    Reply
    • John Williamson, APMA® says

      February 13, 2024 at 4:46 am

      Thanks for the long, thoughtful comment, but I’d disagree. Your arguments seem to largely be a product of recency bias, as is usually the case with the pro-US position. I don’t have time to go through it all but I’ll address a couple.

      Fee delta is a few bps at most, small enough to not even be worth mentioning.

      You mention int’l not working in major sudden crashes. No one worth their salt would expect it to, as we’re still talking about all stocks, for which US and ex-US have a strong positive correlation, albeit imperfect. That’s what bonds are for, specifically treasuries.

      From your “fifth” point – it’s funny because I’d draw the opposite conclusion: don’t concentrate wealth in one single country’s stock market, even the U.S.

      I’d encourage you to check out my more thorough post on international stocks here.

      Reply

Leave a Reply Cancel reply

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

Primary Sidebar

  • Facebook
  • Instagram
  • Reddit
  • Twitter
  • YouTube
  • Patreon

Join 5,372 other investors

Take control of your financial future by subscribing to receive exclusive emails with expert tips, news, and notifications of new posts and important updates.

Don't worry, I hate spam too. No ads.

John Williamson, APMA®

Analytical data nerd, investing enthusiast, fintech consultant, Boglehead, and Oxford comma advocate. I'm not a big fan of social media, but you can find me on LinkedIn and Reddit. Read More…

Most Popular

Ray Dalio All Weather Portfolio Review, ETFs, & Leverage (2025)

HEDGEFUNDIE’s Excellent Adventure (UPRO/TMF) – A Summary

Golden Butterfly Portfolio Review and M1 Finance ETF Pie

David Swensen Portfolio (Yale Model) Review and ETFs To Use

55 Lazy Portfolios and Their ETF Pies for M1 Finance (2025)

VIG vs. VYM – Vanguard’s 2 Popular Dividend ETFs (Review)

Warren Buffett ETF Portfolio (90/10) Review and ETFs (2025)

Bogleheads 3 Fund Portfolio Review and Vanguard ETFs (2025)

Paul Merriman Ultimate Buy and Hold Portfolio Review & ETFs (2025)

The Best M1 Finance Dividend Pie for FIRE & Income Investors

m1 sidebar

retirable

Portfolio Asset Allocation by Age – Beginners To Retirees

The 7 Best Small Cap ETFs (3 From Vanguard) for 2025

9 Best International ETFs To Buy (6 From Vanguard) in 2025

The 3 Best Inverse ETFs to Short the S&P 500 Index in 2025

Ben Felix Model Portfolio (Rational Reminder, PWL) ETFs & Review

Factor Investing and Factor ETFs – The Ultimate Guide

NTSX ETF Review – WisdomTree U.S. Efficient Core ETF (90/60)

The Ginger Ale Portfolio (My Own Portfolio) and M1 ETF Pie

TQQQ – Is It A Good Investment for a Long Term Hold Strategy?

QYLD – Avoid This ETF as a Long-Term Investment (A Review)

The 9 Best T Bill ETFs (Treasury Bills) To Park Cash in 2025

JEPI ETF Review – JPMorgan Equity Premium Income ETF

SPAXX vs. FZFXX, FDIC, FCASH, FDRXX – Fidelity Core Position

Recent Posts

M1 Earn High Yield Cash Account Review – 4% APY (2025)

RSBY ETF Review – Return Stacked® U.S. Bonds & Futures Yield ETF

1 ETF for Life to Get Rich? It’s Not One You’d Guess…

How to Get 35% off a New Tesla Model Y (1.99% APR Financing Promo)

M1 Finance New Dividend Reinvestment Features Are Here! (Sneak Peek)

RSSY ETF Review – Return Stacked® U.S. Stocks & Futures Yield ETF

RSBT ETF Review – Return Stacked® Bonds & Managed Futures ETF

RSST ETF Review – Return Stacked® US Stocks & Managed Futures ETF

CAOS ETF Review – Alpha Architect Tail Risk ETF

How to Get 33% off a New Tesla Model Y (0.99% APR Promo)

CALF ETF Review – Pacer U.S. Small Cap Cash Cows 100 ETF

Is THIS the Best Portfolio?

AVMA ETF Review – Avantis Moderate Allocation ETF (60/40 + Factors)

COWZ ETF Review – Pacer U.S. Cash Cows 100 ETF

BOXX ETF Review – Alpha Architect 1-3 Month Box ETF

View All...

Footer

  • Facebook
  • Instagram
  • Reddit
  • Twitter
  • YouTube
  • Patreon

Amazon Affiliate Disclosure

OptimizedPortfolio.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Email Newsletter

Sign up to receive email updates when a new post is published.

Don't worry, I hate spam too. No ads.

About - My Toolbox - Privacy - Terms - Contact


Copyright © 2025 OptimizedPortfolio.com

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Ok, Got ItReject Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT