John Bogle on investing and cycles

Your success in investing will depend in part on your character and guts and in part on your ability to realize, at the height of ebullience and the depth of despair alike, that this too, shall pass.

~ John Bogle

John Bogle on investing and avoiding mistakes

Investing is not nearly as difficult as it looks.  Successful investing involves doing a few things right and avoiding serious mistakes.

~ John Bogle, founder of The Vanguard Group

John Bogle on investing and excitement

If you’re in investing for excitement, you’re a damn fool.

~ John Bogle, index fund pioneer

John Bogle on mentoring

Mentoring, in my mind, is less about helping someone fill out a checklist of accomplishments, and much more about passing along the immeasurable qualities one needs to be successful in their field --character, professionalism, honesty, intellectual curiosity, even humor. If you possess sufficient amounts of those characteristics, you're likely to be successful in whatever field you work in.

~ John Bogle

John Bogle sees investment management as a zero sum game

In the debate about the fiduciary rule, one basic fact has been largely ignored. Investment wealth is created by our public corporations and reflected in stock prices. Stock market returns are then allocated between the financial industry (Wall Street) and shareholders (Main Street). So when the consulting firm A.T. Kearney projected that the fiduciary rule would result in as much as $20 billion in lost revenue for the industry by 2020, it meant that net investment returns for investors would increase by $20 billion.

By any definition, that’s a social good.

~ John Bogle, "Putting Clients Second," The New York Times, February 9, 2017

Kevin Duffy on the Fiduciary Rule

If we’re going to pass a law against conflicts of interest, shouldn’t there be a law against lobbying the government when such a conflict exists?  (Which is always, of course.)  How can John Bogle not admit that he and his friends benefit from the Fiduciary Rule?

The irony, of course, is that indexation needs discovery agents, and this legislation will put more obstacles in their path.  Without price discovery (e.g., interest rates set by the market) and discovery agents (active investors, short sellers, upstart entrepreneurs), there is no vibrant economy that generates the returns Mr. Bogle’s customers covet.

It can’t be a coincidence that the government only recently discovered the merits of high-liquidity low-fee investing after a tripling of the S&P 500 in 8 years and a 35 year bull market in bonds.  Should we be thanking them for ringing the bell yet again?

~ Kevin Duffy, April 11, 2017

Jack Bogle on commodity investing as speculation

The problem with commodities, gold included, is they’re completely ranked speculation while the ways of delivering stock and bond return are easy. Stocks are riskier but they grow at the rate of our GDP. I think this is gonna be a good decade for that, but I’m worried about the obvious aberrations we’re facing in a political system that doesn’t’ want to respond to current events that gravely affect our nation.

~Jack Bogle, founder, Vanguard, FOX Business interview, March 30, 2011

Jack Bogle on stocks vs. bonds in early 2011

This is a very difficult time to invest because the alternatives to stock are not all that attractive. Money market funds, to be candid, are really kind of a bad joke. With bonds, I worry about rising interest rates; it’s highly likely, but I don’t think anything is a certainty. I would confine my bond position to intermediate term bonds or limited-term bonds. So be careful, but you’ve gotta put the money somewhere or it’s not gonna earn anything

~Jack Bogle, founder, Vanguard, FOX Business interview, March 30, 2011

Jack Bogle, king of the money market fund, on cash as an investment

Cash is a terrible long term investment. It is the one way I know of to guarantee you will earn no return from now to your retirement. Why would anyone want to do that? It’s looked at as a haven, things are disruptive now and I’ll go to cash but I will jump back in when things look good. Well you may get out now, but a good example is Japan. That cash was probably raised at the bottom of the US market and Japanese market even more and people are probably now saying I didn’t get back in quickly enough, but getting in and out, I regret to say, is a loser’s game.

~Jack Bogle, founder, Vanguard, FOX Business interview, March 30, 2011

Vanguard founder Jack Bogle on stocks for the long run

Stay the course. Don’t let these distractions get in the way of an intelligent investment program. There is a long trail between today and the retirement of most people. The whole idea of investing is to build a sum for your retirement and there’s no better way to do that than stocks. They will be good in the long run, but not as good as in the past because dividend yields are so low.

~Jack Bogle, founder, Vanguard, FOX Business interview, March 30, 2011

John Bogle on the Go-Go Sixties

Q: What was your biggest mistake?  

Bogle: When I was 38, I became head of Wellington Management, and I did an extremely unwise merger.  I got wrapped up in the excitement of the go-go era, and the go-go era ended.  As a result of that stupid decision, I got fired.  The great thing about that mistake, which was shameful and inexcusable and a reflection of immaturity and confidence beyond what the facts justified, was that I learned a lot.  And if I had not been fired then, there would not have been a Vanguard. 

~ John Bogle, "Questions For John Bogle," Fortune, December 24, 2007