For almost thirty years, Brian Rogers has been at the helm of the $30 billion T. Rowe Price Equity Income Fund. Next year, he’ll be stepping down but will remain Chairman and Chief Investment Officer of the Baltimore-based asset manager. Here’s excerpts from his interview with Pat Regnier of MONEY magazine, touching on some of the key points we think investors need to know.
Q: Where are the good investments now?
A: Neither the stock nor the bond market is inexpensive right now. I suspect that bonds are the more extended and overpriced. It’s simply harder to find things to invest in. We look for laggards and emphasize quality.
Q: What should a person do in this situation?
A: When everything is expensive, you have to be prepared to not make as much. There is a psychological adjustment, but also a lifestyle affordability adjustment.
Q: So I might have to rethink how much I can safely draw from savings.
A: Absolutely, yes.
The Takeaway: What Rogers is saying in plain English is that future returns on investments may be lower than in the past. You need to be prepared to save more and spend less if you want your money to last.