Yes, the investor is often his own worst enemy. Yes, the marketing colossus known as the mutual fund industry provides the weaponry which enables investors to indulge their suicidal instincts. No, the fund industry was hardly an innocent bystander in the market boom and the subsequent carnage. "We have met the enemy and he is us"... all of us.

John C. Bogle

Categorized in : Worst Enemy Suicidal Bystanders

Rely on the ordinary virtues that intelligent, balanced human beings have relied on for centuries: common sense, thrift, realistic expectations, patience, and perseverance.

John C. Bogle

perseverance motivational life

Time is your friend; impulse is your enemy.

John C. Bogle

siren-song impulse enemy

Learn every day, but especially from the experiences of others. It's cheaper!

John C. Bogle

cheaper

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

John C. Bogle

successful mistake looks

Don't look for the needle in the haystack. Just buy the haystack!

John C. Bogle

financial-success investment looks

It's very difficult for any particular segment of the stock market to sustain superior performance. The watch word for our financial markets is, "reversion to the mean" i.e. what goes up must come down, and it's true more often than you can imagine.

John C. Bogle

financial imagine mean

The miracle of compounding returns has been overwhelmed by the tyranny of compounding costs.

John C. Bogle

investing cost miracle

The historical data support one conclusion with unusual force: To invest with success, you must be a long-term investor.

John C. Bogle

data support long

If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks.

John C. Bogle

investing money loss

The mistakes we make as investors is when the market's going up, we think it's going to go up forever. When the market goes down, we think it's going to go down forever. Neither of those things actually happen. Doesn't do anything forever. It's by the moment.

John C. Bogle

mistake forever thinking

Index funds eliminate the risks of individual stocks, market sectors, and manager selection. Only stock market risk remains.

John C. Bogle

investing individual risk

Ask yourself: Am I an investor, or am I a speculator? An investor is a person who owns business and holds it forever and enjoys the returns that U.S. businesses, and to some extent global businesses, have earned since the beginning of time. Speculation is betting on price. Speculation has no place in the portfolio or the kit of the typical investor.

John C. Bogle

typical return forever

The general systems of money management today require people to pretend to do something they can't do and like something they don't. It's a funny business because on a net basis, the whole investment management business together gives no value added to all buyers combined. That's the way it has to work. Mutual funds charge two percent per year and then brokers switch people between funds, costing another three to four percentage points. The poor guy in the general public is getting a terrible product from the professionals.

John C. Bogle

two people years

In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses.

John C. Bogle

investing running long

The mutual fund industry has been built, in a sense, on witchcraft.

John C. Bogle

mutual-fund witchcraft built

Speculation leads you the wrong way. It allows you to put your emotions first, whereas investment gets emotions out of the picture.

John C. Bogle

emotion way firsts

I believe that the behavior of too many of our corporations investment bankers and fund managers has jeopardized some of the trust that investors have had. It's not the economic engine that we need to focus on, but the need to make sure that our investors receive their fair share of the returns that that great economic system produces.

John C. Bogle

investment focus believe

Reversion to the mean is the iron rule of the financial markets.

John C. Bogle

iron business mean

The courage to press on regardless - regardless of whether we face calm seas or rough seas, and especially when the market storms howl around us - is the quintessential attribute of the successful investor.

John C. Bogle

storm successful sea

We live in a very risky world and investors should not get "carried away" with excessive allocations to equities, or for that matter, real estate. As always asset allocation and low cost and broad diversification will be essential in earning one's fair share of whatever returns our financial markets are generous enough to bestow upon us.

John C. Bogle

financial real world