In 1976, Jack Bogle changed the investing world forever.
He invented index funds which contain almost $10 trillion in total assets by now.
He also founded Vanguard, the second-largest Asset Management firm in the world.
Here are 7 Investment Lessons of Mastermind Jack Bogle
He invented index funds which contain almost $10 trillion in total assets by now.
He also founded Vanguard, the second-largest Asset Management firm in the world.
Here are 7 Investment Lessons of Mastermind Jack Bogle
1. Remember Reversion to the Mean
“Don’t think the past is prologue, it rarely is. Sometimes it’s anti prologue.”
Investors tend to storm funds and stocks that are currently outperforming.
This recency-biased action is very costly.
“Don’t think the past is prologue, it rarely is. Sometimes it’s anti prologue.”
Investors tend to storm funds and stocks that are currently outperforming.
This recency-biased action is very costly.
By definition, all extreme deviations from the mean will be short-term.
That goes for over- and underperformance.
That goes for over- and underperformance.
2. Leverage Time in the Market
Great wealth is built by compounding.
Two things should be your primary focus.
1. Start as early as you can.
The longer you invest, the larger the leverage of time.
2. Never interrupt the process.
As Buffett said, never lose money.
Great wealth is built by compounding.
Two things should be your primary focus.
1. Start as early as you can.
The longer you invest, the larger the leverage of time.
2. Never interrupt the process.
As Buffett said, never lose money.
3. Invest You Must
Investing is without alternative.
Not investing is the biggest risk people can take.
Without earning a sufficient return on ones capital it’ll certainly lose value over time
There’s no equal alternative to participating in the markets.
Investing is without alternative.
Not investing is the biggest risk people can take.
Without earning a sufficient return on ones capital it’ll certainly lose value over time
There’s no equal alternative to participating in the markets.
4. Buy Right and Hold Tight
Most people aren’t traders by choice.
Their research before establishing a position is simply insufficient.
Therefore, small changes in price and rather unimportant news are intimidating enough to panic-sell.
Most people aren’t traders by choice.
Their research before establishing a position is simply insufficient.
Therefore, small changes in price and rather unimportant news are intimidating enough to panic-sell.
Instead, investors should invest more time in researching and thus gain confidence in their decision.
If that’s too hard or time-consuming, there’s always Jack Bogle’s favorite option, an index fund.
If that’s too hard or time-consuming, there’s always Jack Bogle’s favorite option, an index fund.
5. Forget the Needle, Buy the Haystack
Speaking about index funds.
Very few investors and even fewer retail investors succeed with their stock-picking skills.
According to Jack Bogle, choosing a broad, diversified index fund will serve investors a lot better.
Speaking about index funds.
Very few investors and even fewer retail investors succeed with their stock-picking skills.
According to Jack Bogle, choosing a broad, diversified index fund will serve investors a lot better.
6. Have Realistic Expectations
The historical return for stocks as an asset class is about 7%.
This is the return you can expect from owning a worldwide, diversified index fund in the long run.
As you can see in the table above, at 7%, your money doubles every ten years.
The historical return for stocks as an asset class is about 7%.
This is the return you can expect from owning a worldwide, diversified index fund in the long run.
As you can see in the table above, at 7%, your money doubles every ten years.
Most investors dramatically overestimate their abilities and aim for absurd returns.
Such expectations will cause you to make mistakes and take huge risks.
Realistic expectations are the foundation for your investing journey.
Such expectations will cause you to make mistakes and take huge risks.
Realistic expectations are the foundation for your investing journey.
7. Inactivity is Hard but Necessary
You’re bombarded with news every day.
You’ll hear that everything will go south thousands of times, the same goes for bullish news.
Remaining unaffected by this has been the most profitable thing to do historically.
Stay the course.
You’re bombarded with news every day.
You’ll hear that everything will go south thousands of times, the same goes for bullish news.
Remaining unaffected by this has been the most profitable thing to do historically.
Stay the course.
Summary:
1. Everything Reverses to its Mean
2. Time is your Friend
3. Investing is without Alternative
4. Buy Right and Hold
5. Buy the Haystack, not the Needle
6. Have Realistic Expectations
7. Inactivity is King
1. Everything Reverses to its Mean
2. Time is your Friend
3. Investing is without Alternative
4. Buy Right and Hold
5. Buy the Haystack, not the Needle
6. Have Realistic Expectations
7. Inactivity is King
That’s it for today!
In case this Thread helped you in any way, please consider Retweeting and Liking it.
Learn more about Investment Philosophy by following me @MnkeDaniel
Have a Great Weekend!
In case this Thread helped you in any way, please consider Retweeting and Liking it.
Learn more about Investment Philosophy by following me @MnkeDaniel
Have a Great Weekend!
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