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John Templeton was just great. And very practical. He used to be interviewed by Louis Rukeyser every January, and lay out a simple investing roadmap for the non-professional investor to follow for that specific year. I subscribed to Rukeyser's investing newsletter, and my favorite issue was always the January issue with the John Templeton interview. You always knew exactly what he thought investors should do, based on the specific investing environment. He would give the specific mutual funds and investments, and they were not Templeton Funds. Such an honest and forthright person.
I've never been able to apply religion to investing like Sir John. However, with that exception, I agree with the rest. While money is often portrayed as "the root of all evil," it's amazing the number of wise, compassionate, generous and insightful (even philosophical) thinkers it has brought us in just the last century. We all have our favorites. rbj mentions two. And, if either had a mean bone in his body, I never saw it.*
*Well ... umm ... maybe the night PBS canned Rukeyser:-)
Life is more complicated than what is guided by puritanical sayings. These rules are the equivalent in investing.
They aren't wrong per se, but can be interpreted like Rorschach ink blots to justify things good or bad, like @old_Skeet's interpretation of diversification. They are popular because they are general or abstract enough to confirm our own views, biases and actions.
On close examination, some of these rules contradict each other or contradict other wise views say from John Bogle.
The purpose of this post is not to discredit the rules but rather to show that investing isn't helped by such rules which can justify good habits as well as bad habits.
1. If you begin with a prayer, you can think more clearly and make fewer mistakes.
I don't know if it will and there aren't any studies to prove it. However, faith can sometimes help (as much as it can hurt if you rely on it too much). Buy there ARE studies to show that even a small physical workout to start the day, will improve thinking and make you less prone to cognitive mistakes. It will likely help you keep investing for a longer time than praying alone!
2. Outperforming the market is a difficult task. The challenge is not simply making better investment decisions than the average investor. The real challenge is making investment decisions that are better than those of the professionals who manage the big institutions.
Being so general, this can be interpreted to support many different views some contradictory to each other - even some of his own rules below.
You can interpret this to say you should not buy individual stocks at all but an index fund as John Bogle would suggest and that contradicts some rules below.
Or you can interpret this to say that you should leave the stock picking to a professional manager as many in this forum justifiably believe because they can make better judgments in contradiction to indexology.
Which interpretation you use depends on your own views and biases that it confirms and so the saying seems wise to all. Ink blot.
3. Invest - don't trade or speculate. The stock market is not a casino, but if you move in and out of stocks every time they move a point or two, the market will be your casino. And you may lose eventually --or frequently.
True only in extremes as pointed out and contradicts rule 12. One investor's complacency is another investor's speculation. Bogle would consider a retail investor doing rule 12 below as a trader or a speculator depending on how many changes one did to react. Can be interpreted to justify any level of complacency. If you trade more than I do, it is speculation, if less, it is complacency. Ink blot rule.
4. Buy value, not market trends or the economic outlook. Ultimately, it is the individual stocks that determine the market, not vice versa. Individual stocks can rise in a bear market and fall in a bull market. So buy individual stocks, not the market trend or the economic outlook.
Directly contradicts Bogle's advice and an interpretation of Rule 2 above. Why do you think you can do better than professionals in large institutions or why do you think you can do better than buying a broad index instead as Bogle suggests? An index fund is exactly buying the market trend than individual stocks.
5. When buying stocks, search for bargains among quality stocks. Determining quality in a stock is like reviewing a restaurant. You don't expect it to be 100% perfect, but before it gets three or four stars you want it to be superior.
Too simplistic, even if you were to agree with picking individual stocks. What makes you think, you can spot better bargains than others or professional investors? In the face of incomplete information and unpredictable future, how do you establish a bargain? Can justify any number of false metrics. Besides, if a retail investor can really do this was Bogle wrong then?
6. Buy low. So simple in concept. So difficult in execution. When prices are high, a lot of investors are buying a lot of stocks. Prices are low when demand is low. Investors have pulled back, people are discouraged and pessimistic. But if you buy the same securities everyone else is buying, you'll have the same results as everyone else. By definition you can't outperform the market.
Too simple a concept to be useful. Stocks don't come labeled low. What is low is an opinion and a bet and open to different metrics. That is what makes a market. Buying a big index fund is exactly like buying the same securities as everyone else. Is that wrong then? Bogle also starts with the assumption you cannot outperform the market but suggests a contradictory solution. How can both be right?
7. There's no free lunch. Never invest on sentiment. Never invest solely in a tip. You would be surprised how many investors do exactly this. Unfortunately there is something compelling about a tip. Its very nature suggests inside information, a way to turn a fast profit.
One of the rules that is specific enough to not leave it open for contradictory interpretation. Good rule. All the people who buy funds based on a tip in these forums would feel guilty!
8. Do your homework, or hire wise experts to help you. People will tell you: investigate before you invest. Listen to them. Study companies to learn what makes them succesful.
Good rule not prone to contradictory interpretations.
9. Diversify - by company, by industry. In stocks and bonds, there is safety in numbers. No matter how careful you are, you can neither predict nor control the future. So you must diversify.
This is the raison d'etre for mutual funds because they can diversify better than individual investors. However, can be interpreted to diversify amongst 50+ mutual funds on top of the stock diversification. Doesn't say anything about how much is good and how much is bad so can justify good habits and bad.
10. Invest for maximum total real return. This means the return after taxes and inflation. This is the only rational objective for most long-term investors.
Good rule. I don't know any investors who knowingly violate this rule to learn from it.
11. Learn from your mistakes. The only way to avoid mistakes is not to invest - which is the biggest mistake of all. So forgive yourself for errors and certainly don't try to recoup losses by taking bigger risks. Instead, turn each mistake into a learning experience.
Absolutely true. Problem is that people aren't good at learning from mistakes. Moreover, they don't know how to identify a mistake but rather form an opinion based on the result of that mistake and land up with another mistake as the learning. For example, people buy some stocks and get burnt. Was the mistake in stock selection, poor research, bad timing or the concept of buying stocks itself? The rule won't help you determine that and your learning conclusion can be another mistake. Everybody thinks they learnt from their mistakes. Ink blot.
12. Aggressively monitor your investments. Remember no investment is forever. Expect and react to change. And there are no stocks that you can buy and forget. Being relaxed doesn't mean being complacent.
Consistent or in total contradiction to a buy and hold philosophy depending on how you interpret aggressively and so can make a wide spectrum of people think they are doing right by this rule. Besides, where is the line between this and the extreme in rule 3?
13. An investor who has all the answers doesn't even understand the questions. A cocksure approach to investing will lead, probably sooner than later, to disappointment if not outright disaster. The wise investor recognises that success is a process of continually seeking answers to new questions.
Probably the most misinterpreted rule. No one has all the answers, no one has zero answers. But often used to justify one's own ignorance more than trying to seek knowledge. This very post of mine can be interpreted as views of someone having all the answers or it can be interpreted as asking new questions for answers than assuming these rules have all the answers. Depends on your own biases and views. Ink blot. All I know is that one who seeks knowledge wisely has more answers than one who just thinks he does.
14. Remain flexible and open-minded about types of investment. There are times to buy blue-chip stocks, cyclical stocks, and convertible bonds, and there are times to sit on cash. The fact is there is no one kind of investment that is always best.
In total contradiction to Bogle or passive investing. Can even be interpreted to endorse active investing or market timing. And yet proponents of both of these will consider this rule set to be wise. Ink blot.
15. Don't panic. Sometimes you won't have sold when everyone else is selling, and you will be caught in a market crash. Don't rush to sell the next day. Instead, study your portfolio. If you can't find more attractive stocks, hold on to what you have.
Specific enough to be not open to interpretations and so a good rule. However, I think the adage/song lyric "know when to hold 'em, know when to fold 'em" is wiser!
16. Do not be fearful or negative too often. There will, of course, be corrections, perhaps even crashes. But over time our studies indicate, stocks do go up ….and up … and up. In this century or the next, it's still "Buy low, sell high."
Nice clichés but not of much use to someone who doesn't have forever time horizon or has perhaps witnessed far more crashes than since these rules were written.
"Nice clichés but not of much use to someone who doesn't have forever time horizon or has perhaps witnessed far more crashes than since these rules were written."
This is one truth that I have gone around with Hulbert on. Sooner or later one must sell. The only reason not to is if one did not need or want the money.
Yep - Unless you're inclined to pass it along to posterity, you will likely sell most of it. Seems to me therefore that as that eventuality draws nearer, a gradual but steady shift into more and more conservative investments makes sense. Personally, I intend to be pretty heavy into cash by my 95th birthday.
cman: You said : "On close examination, some of these rules contradict each other or contradict other wise views say from John Bogle."
I get the feeling you are a big fan of Bogle. Just wondering how you feel about his widely cited recommendation that an investor's bond holdings in a portfolio should be roughly equal to his/her age. For example, a 70 year old would have 70% in bonds and 30% in equities.
Thanks for any thoughts or other insights into the teachings of Mr. Bogle.
Not Cman ... but, I look forward to be reading what he has to say.
For my base line equity allocation I use 110 minus my age. For me this results in a base line for equities at about 45%. Anything above this would be overweighting and anything below this percentage would be underweighting. Not saying this is the gospel ... It is just how I look at it. Currently, I am about cash 15%, income 25%, equity 50% and other 10% as of my last Xray report (05/01/2014). I try to hold enough cash to get me through a three year rough patch without having to sell any investment positions plus allow me to take advantage of opportunity should I find something of interest I might choose to venture into. In addition, don't forget to factor in your risk tolerance.
cman: You said : "On close examination, some of these rules contradict each other or contradict other wise views say from John Bogle."
I get the feeling you are a big fan of Bogle. Just wondering how you feel about his widely cited recommendation that an investor's bond holdings in a portfolio should be roughly equal to his/her age. For example, a 70 year old would have 70% in bonds and 30% in equities.
Thanks for any thoughts or other insights into the teachings of Mr. Bogle.
+++++++++++++
hank, sorry to butt in to your conversation with cman....... Just a note: Bogle isn't quite as strict on that bond % allocation, because he believes in factoring in social security or other pension payments into the equation. He believes in counting the social security or other pension monthly payments as a sort of 'phantom bond holding'. That effectively increases the amount you can invest in equities and still be within his 'age in bonds' guideline. Let me make up some numbers to illustrate the point. Let's say someone receives $2000 a month in social security/pension. That equates to a 'phantom bond' of $800,000 paying 3% interest per annum, for life. So count that $800,000 as a bond that you own in your portfolio. So that 70 year old can now have $342,857 in equities and still be 70% fixed income/30% equities, assuming no other holdings. On another note, he also believe that the Total Bond Market Index is a flawed index and should not make up the total fixed income holdings. But that's the subject of another post. If you need more information on Bogle's thoughts on bonds, I can probably dig it up for you on my computer.
Not Cman ... but, I look forward to be reading what he has to say.
For my base line equity allocation I use 110 minus my age. For me this results in a base line for equities at about 45%. Anything above this would be overweighting and anything below this percentage would be underweighting. Not saying this is the gospel ... It is just how I look at it. Currently, I am about cash 15%, income 25%, equity 50% and other 10% as of my last Xray report (05/01/2014). Old_Skeet
++++++++++ @Old_Skeet : Good post. I recall you posting your 12 portfolio 'sleeves' a while back (a very nice post, by the way), and I don't recall an "other" sleeve. That may just be Morningstar's characterization from the Xray report. What's in that "other" that makes up 10% of your portfolio? I don't recall you having 'alternative funds' like managed futures, merger/arbitrage, etc.
I'm not a fan of Morningstar's use of that "other" when they break down the asset allocation in the Portfolio tab of a mutual fund. It tells you almost nothing. In some cases I have found it refers to gold or precious metals; in others, it can be an equity ETF or mutual fund; in others, alternative investments
Yep - I'm aware of Bogle's latest "edition" (Bogle 2.0?). However, not too sure that was his position 20 years ago when his bond/equity/age formula was widely discussed by him and garnered considerable public attention.
Yes - he would count projected Social Security income as part of one's bond position. By the same logic, we might also include insurance policies, annuities, pensions, rental income, payments from reverse mortgages, anticipated tax credits & refunds and, potentially, projected appreciation of real estate, art and collectibles.
As a side note, in some interviews over the last decade Mr. Bogle has expressed concerns about the very low rates recently available on longer term bonds and has, I believe, suggested a more moderate bond duration than originally promulgated - now emphasizing shorter and intermediate term bonds.
Merriman is adamant about not thinking of SS this way --- see http://paulmerriman.com/social-security-asset/ --- but he then points that SS can and should affect how you think of the rest of your portfolio, how it should therefore be allocated/balanced, and your cashflow needs. I imagine he and Bogle are in violent agreement in many respects.
Newly retired, I do not know how I come down. Half of my cashflow in a few years will be SS, and I am already biased toward predominantly equities and always have been. Not 100%, of course. How much less than 100%? I do bucketize.
It is my belief that the other asset listing found in Morningstar’s Instant Xray report may consist of many things form funds themselves that employ special strategies, alternative assets, metals, convertibles, preferred securities, commodities, and other assets such as equity linked notes, etc. that are not stocks, bonds, or cash. Anyway, that is my take away for the other asset listing found in the Xray report.
Yep - I'm aware of Bogle's latest "edition" (Bogle 2.0?). However, not too sure that was his position 20 years ago when his bond/equity/age formula was widely discussed by him and garnered considerable public attention.
Yes - he would count projected Social Security income as part of one's bond position. By the same logic, we might also include insurance policies, annuities, pensions, rental income, payments from reverse mortgages, anticipated tax credits & refunds and, potentially, projected appreciation of real estate, art and collectibles.
As a side note, in some interviews over the last decade Mr. Bogle has expressed concerns about the very low rates recently available on longer term bonds and has, I believe, suggested a more moderate bond duration than originally promulgated - now emphasizing shorter and intermediate term bonds.
cman: You said : "On close examination, some of these rules contradict each other or contradict other wise views say from John Bogle."
I get the feeling you are a big fan of Bogle.
Want to clarify that I was not trying to pit Bogle against Templeton as the preferred wise guy. They are both wise and have delivered results. In my book, results matter.
My point was two-fold: 1. The wisdom and results of these guys cannot be captured in one or five or twenty rules. Any such rules are open to multiple interpretations and are too general or even contradictory. Their success comes from a lot more than these rules. 2. Such rules including the one you have asked about the bond allocation can be and are often mis-used in two ways: one, interpreted to justify bad habits or decisions and two, used fallaciously (appeal to authority) to make a religiously held point.
Templeton would be rolling in his grave to know his rule on diversification into multiple stocks was used to justify holding some 50+ funds each of which had hundreds of stocks.
All these rules have a context and insight behind them and it is much better to understand these than literally follow them or worse apply them in very different contexts.
Take the bond allocation rule from Bogle, for example.
Just wondering how you feel about his widely cited recommendation that an investor's bond holdings in a portfolio should be roughly equal to his/her age. For example, a 70 year old would have 70% in bonds and 30% in equities.
The context for this was an era when safe bonds like treasuries would return decent dividends. The insight was that as one aged, they had less capability to withstand equity gyrations and they had built up enough capital over time that they could increasingly move it to fixed income and have the dividends be used later in life. Very simple and common sense concept.
But if the context and insight isn't understood, it can be interpreted foolishly. For example, a 70 year old putting 70% of the portfolio in an aggressive bond fund that invests primarily in EM and Junk bonds. It is consistent with the rule literally but not with the insight.
Rather than literally trying to interpret it (as bible-thumpers do), one can apply the insight into new contexts. For example, what do you do when safe bond assets are returning next to nothing in dividends and may suffer capital loss going forward? No literal interpretation of that rule is going to help. Moving that bond allocation to highly volatile bond categories in search of yield is a dangerous interpretation of that rule.
How about going back to the insight which is really about lowering volatility as one ages and depending on lower returns of less volatile investments in larger portfolios? Bonds (or Treasuries) served that function once but they are just means to an end. There are several ways to do this now in portfolio construction.
I prefer to use the wisdom and insight of these guys in this fashion than listen to the literal Bogle bible thumping fans and talking heads and bloggers.
Comments
*Well ... umm ... maybe the night PBS canned Rukeyser:-)
Regards.
They aren't wrong per se, but can be interpreted like Rorschach ink blots to justify things good or bad, like @old_Skeet's interpretation of diversification. They are popular because they are general or abstract enough to confirm our own views, biases and actions.
On close examination, some of these rules contradict each other or contradict other wise views say from John Bogle.
The purpose of this post is not to discredit the rules but rather to show that investing isn't helped by such rules which can justify good habits as well as bad habits. I don't know if it will and there aren't any studies to prove it. However, faith can sometimes help (as much as it can hurt if you rely on it too much). Buy there ARE studies to show that even a small physical workout to start the day, will improve thinking and make you less prone to cognitive mistakes. It will likely help you keep investing for a longer time than praying alone! Being so general, this can be interpreted to support many different views some contradictory to each other - even some of his own rules below.
You can interpret this to say you should not buy individual stocks at all but an index fund as John Bogle would suggest and that contradicts some rules below.
Or you can interpret this to say that you should leave the stock picking to a professional manager as many in this forum justifiably believe because they can make better judgments in contradiction to indexology.
Which interpretation you use depends on your own views and biases that it confirms and so the saying seems wise to all. Ink blot. True only in extremes as pointed out and contradicts rule 12. One investor's complacency is another investor's speculation. Bogle would consider a retail investor doing rule 12 below as a trader or a speculator depending on how many changes one did to react. Can be interpreted to justify any level of complacency. If you trade more than I do, it is speculation, if less, it is complacency. Ink blot rule. Directly contradicts Bogle's advice and an interpretation of Rule 2 above. Why do you think you can do better than professionals in large institutions or why do you think you can do better than buying a broad index instead as Bogle suggests? An index fund is exactly buying the market trend than individual stocks. Too simplistic, even if you were to agree with picking individual stocks. What makes you think, you can spot better bargains than others or professional investors? In the face of incomplete information and unpredictable future, how do you establish a bargain? Can justify any number of false metrics. Besides, if a retail investor can really do this was Bogle wrong then? Too simple a concept to be useful. Stocks don't come labeled low. What is low is an opinion and a bet and open to different metrics. That is what makes a market. Buying a big index fund is exactly like buying the same securities as everyone else. Is that wrong then? Bogle also starts with the assumption you cannot outperform the market but suggests a contradictory solution. How can both be right? One of the rules that is specific enough to not leave it open for contradictory interpretation. Good rule. All the people who buy funds based on a tip in these forums would feel guilty! Good rule not prone to contradictory interpretations. This is the raison d'etre for mutual funds because they can diversify better than individual investors. However, can be interpreted to diversify amongst 50+ mutual funds on top of the stock diversification. Doesn't say anything about how much is good and how much is bad so can justify good habits and bad. Good rule. I don't know any investors who knowingly violate this rule to learn from it. Absolutely true. Problem is that people aren't good at learning from mistakes. Moreover, they don't know how to identify a mistake but rather form an opinion based on the result of that mistake and land up with another mistake as the learning. For example, people buy some stocks and get burnt. Was the mistake in stock selection, poor research, bad timing or the concept of buying stocks itself? The rule won't help you determine that and your learning conclusion can be another mistake. Everybody thinks they learnt from their mistakes. Ink blot. Consistent or in total contradiction to a buy and hold philosophy depending on how you interpret aggressively and so can make a wide spectrum of people think they are doing right by this rule. Besides, where is the line between this and the extreme in rule 3? Probably the most misinterpreted rule. No one has all the answers, no one has zero answers. But often used to justify one's own ignorance more than trying to seek knowledge. This very post of mine can be interpreted as views of someone having all the answers or it can be interpreted as asking new questions for answers than assuming these rules have all the answers. Depends on your own biases and views. Ink blot. All I know is that one who seeks knowledge wisely has more answers than one who just thinks he does. In total contradiction to Bogle or passive investing. Can even be interpreted to endorse active investing or market timing. And yet proponents of both of these will consider this rule set to be wise. Ink blot. Specific enough to be not open to interpretations and so a good rule. However, I think the adage/song lyric "know when to hold 'em, know when to fold 'em" is wiser! Nice clichés but not of much use to someone who doesn't have forever time horizon or has perhaps witnessed far more crashes than since these rules were written.
This is one truth that I have gone around with Hulbert on. Sooner or later one must sell. The only reason not to is if one did not need or want the money.
Yep - Unless you're inclined to pass it along to posterity, you will likely sell most of it. Seems to me therefore that as that eventuality draws nearer, a gradual but steady shift into more and more conservative investments makes sense. Personally, I intend to be pretty heavy into cash by my 95th birthday.
I get the feeling you are a big fan of Bogle. Just wondering how you feel about his widely cited recommendation that an investor's bond holdings in a portfolio should be roughly equal to his/her age. For example, a 70 year old would have 70% in bonds and 30% in equities.
Thanks for any thoughts or other insights into the teachings of Mr. Bogle.
Not Cman ... but, I look forward to be reading what he has to say.
For my base line equity allocation I use 110 minus my age. For me this results in a base line for equities at about 45%. Anything above this would be overweighting and anything below this percentage would be underweighting. Not saying this is the gospel ... It is just how I look at it. Currently, I am about cash 15%, income 25%, equity 50% and other 10% as of my last Xray report (05/01/2014). I try to hold enough cash to get me through a three year rough patch without having to sell any investment positions plus allow me to take advantage of opportunity should I find something of interest I might choose to venture into. In addition, don't forget to factor in your risk tolerance.
Old_Skeet
hank, sorry to butt in to your conversation with cman.......
Just a note: Bogle isn't quite as strict on that bond % allocation, because he believes in factoring in social security or other pension payments into the equation. He believes in counting the social security or other pension monthly payments as a sort of 'phantom bond holding'. That effectively increases the amount you can invest in equities and still be within his 'age in bonds' guideline. Let me make up some numbers to illustrate the point. Let's say someone receives $2000 a month in social security/pension. That equates to a 'phantom bond' of $800,000 paying 3% interest per annum, for life. So count that $800,000 as a bond that you own in your portfolio. So that 70 year old can now have $342,857 in equities and still be 70% fixed income/30% equities, assuming no other holdings. On another note, he also believe that the Total Bond Market Index is a flawed index and should not make up the total fixed income holdings. But that's the subject of another post. If you need more information on Bogle's thoughts on bonds, I can probably dig it up for you on my computer.
@Old_Skeet : Good post. I recall you posting your 12 portfolio 'sleeves' a while back (a very nice post, by the way), and I don't recall an "other" sleeve. That may just be Morningstar's characterization from the Xray report.
What's in that "other" that makes up 10% of your portfolio? I don't recall you having 'alternative funds' like managed futures, merger/arbitrage, etc.
I'm not a fan of Morningstar's use of that "other" when they break down the asset allocation in the Portfolio tab of a mutual fund. It tells you almost nothing. In some cases I have found it refers to gold or precious metals; in others, it can be an equity ETF or mutual fund; in others, alternative investments
Yep - I'm aware of Bogle's latest "edition" (Bogle 2.0?). However, not too sure that was his position 20 years ago when his bond/equity/age formula was widely discussed by him and garnered considerable public attention.
Yes - he would count projected Social Security income as part of one's bond position. By the same logic, we might also include insurance policies, annuities, pensions, rental income, payments from reverse mortgages, anticipated tax credits & refunds and, potentially, projected appreciation of real estate, art and collectibles.
As a side note, in some interviews over the last decade Mr. Bogle has expressed concerns about the very low rates recently available on longer term bonds and has, I believe, suggested a more moderate bond duration than originally promulgated - now emphasizing shorter and intermediate term bonds.
Here's an old thread from last September in which several of us discussed Bogle's more recent pronouncement.
http://www.mutualfundobserver.com/discuss/discussion/comment/28546/#Comment_28546
Newly retired, I do not know how I come down. Half of my cashflow in a few years will be SS, and I am already biased toward predominantly equities and always have been. Not 100%, of course. How much less than 100%? I do bucketize.
Thanks for the question.
It is my belief that the other asset listing found in Morningstar’s Instant Xray report may consist of many things form funds themselves that employ special strategies, alternative assets, metals, convertibles, preferred securities, commodities, and other assets such as equity linked notes, etc. that are not stocks, bonds, or cash. Anyway, that is my take away for the other asset listing found in the Xray report.
Old_Skeet
My point was two-fold:
1. The wisdom and results of these guys cannot be captured in one or five or twenty rules. Any such rules are open to multiple interpretations and are too general or even contradictory. Their success comes from a lot more than these rules.
2. Such rules including the one you have asked about the bond allocation can be and are often mis-used in two ways: one, interpreted to justify bad habits or decisions and two, used fallaciously (appeal to authority) to make a religiously held point.
Templeton would be rolling in his grave to know his rule on diversification into multiple stocks was used to justify holding some 50+ funds each of which had hundreds of stocks.
All these rules have a context and insight behind them and it is much better to understand these than literally follow them or worse apply them in very different contexts.
Take the bond allocation rule from Bogle, for example. The context for this was an era when safe bonds like treasuries would return decent dividends. The insight was that as one aged, they had less capability to withstand equity gyrations and they had built up enough capital over time that they could increasingly move it to fixed income and have the dividends be used later in life. Very simple and common sense concept.
But if the context and insight isn't understood, it can be interpreted foolishly. For example, a 70 year old putting 70% of the portfolio in an aggressive bond fund that invests primarily in EM and Junk bonds. It is consistent with the rule literally but not with the insight.
Rather than literally trying to interpret it (as bible-thumpers do), one can apply the insight into new contexts. For example, what do you do when safe bond assets are returning next to nothing in dividends and may suffer capital loss going forward? No literal interpretation of that rule is going to help. Moving that bond allocation to highly volatile bond categories in search of yield is a dangerous interpretation of that rule.
How about going back to the insight which is really about lowering volatility as one ages and depending on lower returns of less volatile investments in larger portfolios? Bonds (or Treasuries) served that function once but they are just means to an end. There are several ways to do this now in portfolio construction.
I prefer to use the wisdom and insight of these guys in this fashion than listen to the literal Bogle bible thumping fans and talking heads and bloggers.