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To: Kirk © who wrote (22972)	8/3/2006 10:14:00 AM
From: shres	Read Replies (1) \| Respond to of 42834

Bogle says index funds should be 100% of equity and bond portfolio. None of that core and explore nonsense. Alrau: Do you think that index funds should comprise 100% of my portfolio? Or should they represent just a portion of my total portfolio? Jack Bogle: No reason whatsoever that index funds should not be 100% of an equity portfolio--especially for taxable assets. Ditto in bond funds, except for high-bracket investors, where index-like managed municipal bond funds carry the day. But if you want to hold actively-managed funds, select from those with low costs, low turnover, managers with character and integrity, and consistent (rather than spectacular) records within their peer groups.

To: Kirk © who wrote (22972)	8/3/2006 12:13:30 PM
From: dick_from_chgoo	Read Replies (1) \| Respond to of 42834

"It would not be logical to own every fund at Vanguard because there is overlap in the funds." I would agree, and see little if any need to do so. "Maybe Bogle has a token amount in each for advertising purposes..." Maybe. However, a "token" amount for Mr. Bogle would most likely be one of significance for the average investor. "My reasoning is you really don't know "which experts" are correct so it is good to diversify. Have some money in index funds and have some money in managed funds. Even if your managed funds (Via a newsletter like mine or a managed mutual fund at Vanguard, Fidelity, Price, etc...) don't out perform the benchmark indexes, you should still greatly out perform the average investor who only makes about 20% of the return of the S&P500." Diversification is GREAT!! OK. Using your reasoning, why then would one place a part of their portfolio with an active fund manager if there is a high possibility he (the fund manager) will under perform the index, when a minimally educated investor can realize the S&P or the W5000 guaranteed? If your answer is out performing, then it seems to me the 12% (Malkiel) to 25% (liberal) possibility of doing that is in itself risky. Don't get me wrong, I have no problem with investors selecting managed funds if they are particularly good at it. It's just that most of us are not, as you have pointed out.