Jonathan Clements

THE BOGLEHEADS HAD their annual conference this week in the Philadelphia area, where Vanguard Group’s headquarters is located. Devotees of Vanguard’s 88-year-old founder John C. Bogle, the Bogleheads usually meet online at what’s probably the world’s best investment forum.
The star of their annual meeting was, of course, Jack himself. His latest book, an extensive revision of The Little Book of Common Sense Investing, just came out. What was on Jack’s mind?

IF YOUR INVESTMENTS climb in value, hold the champagne—until you figure out whether it’s a onetime gain or a repeatable performance.
Suppose your foreign stocks post gains because the dollar weakens. Or your bonds climb because interest rates fall. Or stocks rise because price-earnings ratios head higher. Or corporate earnings increase because profit margins expand. Or stocks jump because the corporate tax rate or the capital-gains tax rate is cut.
Sound familiar? All of these things have either happened over the long haul or helped drive share prices higher this year. 

PEOPLE OFTEN ACT foolishly and then desperately try to justify their financial sins. A case in point: Those who take on too much debt, can’t get it paid off by retirement—and end up servicing huge mortgages and other loans long after their paychecks have come to an end.
Cue the tap dancing. The indebted start waxing eloquent about the virtues of the mortgage-interest tax deduction and how it’s smart to pay the bank 4% while they invest the borrowed money at 10%.

“WHEN YOU’VE WON the game, stop playing with the money you really need.” That’s something my longtime friend and fellow author William Bernstein is fond of saying—and lately it’s been on my mind.
There’s been much handwringing over 2017’s stock market rally. Looked at objectively, it hasn’t been that startling. As of Sept. 29, the S&P 500 was up 14.2% for the year-to-date, with dividends reinvested—a good year, but nothing compared to the 25%-plus years we saw in 1991,

HAVEN’T GIVEN MUCH thought to estate planning and charitable giving? Here are 10 questions to jumpstart your thinking:

Can you afford to give away money now? You shouldn’t gift large sums to your children or charity unless you’re confident you have enough for your own retirement. There’s no limit on gifts to charity, though your annual tax deduction may be capped. For gifts to family members, you might take advantage of the annual gift-tax exclusion,

I HEAR SO MANY compelling investment arguments. That U.S. stocks are destined to generate lackluster returns because valuations are so rich. That there’s no need to own foreign stocks because you get enough international exposure with U.S. multinationals. That interest rates have nowhere to go but up.
And yet U.S. stocks keep clocking gains, U.S. and foreign shares often generate radically different annual results, and interest rates show no signs of heading significantly higher.

“IT HAS LONG BEEN important to us to help our children and 12 adult grandchildren learn some of the fundamentals of saving and investing,” wrote Henry “Bud” Hebeler in a Feb. 26 email to me. “I sent them each a booklet that I wrote, illuminating the key elements that I have talked about in the past. To test their comprehension, I sent the following message.”
Bud died in August, nine days after his 84th birthday.

GOT DEBT? TO GET a handle on the situation and figure out whether you’re handling your loans and credit cards properly, here are 10 questions to ask:

What’s your net worth? You might have a home and sizable financial accounts. But what are you worth once you subtract all your debts?
Are you taking the necessary steps to stop thieves from borrowing money using your identity? To protect yourself, regularly check your credit reports for errors and accounts you don’t recognize,

WE MAKE ALL KINDS of financial mistakes: spend too much, borrow too much, buy expensive investment products, try to beat the market. To be sure, there are some folks who simply don’t know better. But others give the issue serious thought—and still act foolishly, justifying their behavior with cockamamie arguments. Here are five such justifications that I’ve heard in recent months:
 1. “It’s okay to spend money if it cheers me up.” This is the crack cocaine school of budgeting.

WE’RE WORTH SO MUCH more than the value of our homes and our financial accounts. But how much more? Forget your car and household possessions. Unless you have a Chagall hanging in the living room, it’s safe to assume all this stuff will depreciate and eventually be worth little or nothing.
Instead, our three assets with potentially significant value are our regular paycheck, our Social Security retirement benefit and any traditional employer pension we’re entitled to.

THE EQUIFAX DATA breach seems to be a tipping point, unleashing a barrage of articles—and a boatload of angst—about the security of personal information. What are the potential problems and what’s the best way to defend yourself? I got some great ideas from followers of my Facebook page, where I posted a draft of this article and asked for feedback.
It seems there are five key scenarios where hackers could potentially wreak havoc with your financial life.

TALKING TO A BROKER or insurance salesman? Here are 10 things you’ll likely never hear:

“Wow, your 401(k) has great low-cost institutional funds. There’s no way you should roll that money into an IRA.”
“Do you know that you could buy these funds outside a variable annuity and pay a fraction of the price?”
“Sure, you could make that trade—but probably the only person who will get richer is me.”
“My hunch is, this closed-end fund you’re buying will be at discount within a few months of the IPO.”
“Given the markup on that bond you just bought,

WANT TO BOOST YOUR after-tax wealth? Grab copies of your latest tax return and investment statements—and ask yourself these 10 questions:

What’s your marginal tax rate? That’s the tax rate on the last dollar of income you earn each year. It’s a crucial piece of information as you decide which retirement accounts to fund and how to invest your taxable account. You can get a quick estimate using Dinkytown’s calculator.
Do you expect your marginal tax rate to be higher or lower once you’re retired?

IF WE HAVE DINNER with half-a-dozen others, we might all share the same meal and yet each of us will have a different experience—sometimes radically different. Even as we talk politics, crack jokes and swap gossip, we’ll each have our own thoughts whirling in the background: errands we can’t forget, work issues we need to resolve, incidents from the day we keep replaying, worries we can’t put behind us.
For me, those whirling background thoughts often concern financial notions I want to write about.

REVIEWING YOUR investment strategy? To get you started, here are 10 questions to wrestle with:

How much cash you will need from your portfolio over the next five years? That money should be out of stocks and riskier bonds—and invested in nothing more adventurous than short-term bonds.
What’s the total sum you expect to save between now and retirement? If you look at that future savings as a cash holding and count it as part of your portfolio’s conservative investments,