The concept of investing for a lifetime and focusing largely on asset allocation and diversification has gotten lost in the noise of short-term, even daily and sometimes minute-by-minute movements of the volatile stock market. I can only restate my warning that “the stock market is a giant distraction from the business of investing.
John C. BogleLong-term value, not short-term price, rules the world, simply reinforcing the classic Graham principle about the voting machine and the weighing machine.
John C. BogleConsider a 50/50 stock bond balance, and then raise the stock allocation if:
John C. BogleYou have years remaining to accumulate wealth.
John C. BogleThe amount of capital you have at stake is modest.
John C. BogleYou have little need for current income.
John C. BogleYou have the courage to ride out booms and busts with reasonable equanimity.
John C. BogleAs you age, lower your stock allocation accordingly.
John C. BogleThe fox knows many things, but the hedgehog knows one great thing. The fox—artful, sly, and astute—represents the financial institution with investment professionals who know many things about complex markets and sophisticated strategies. The hedgehog—whose sharp spines give it almost impregnable armor when it curls into a ball—is the financial institution that knows only one great thing: longe-term investment success is based on simplicity.
John C. BogleThe wily foxes of the financial world justify their existence by propagating the notion that an investor can survive only with the benefit of their artful knowledge and professional expertise. Their assistance, alas, does not come cheap. The costs it entails tend to consume any value that even the most cunning of foxes can add. Result: the annual returns earned for investors by financial intermediaries such as actively managed mutual funds have averaged less than 80 percent of the stock market’s annual return— a huge loss when compounded over decades.
John C. Bogle
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