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Bogle offers disarmingly simple advice: employ low-cost index funds in a low-turnover, disciplined portfolio strategy. Unfortunately, few follow his sensible advice. The vast majority of investors play an active management game in which they
investing is an act of faith, a willingness to postpone present consumption and save for the future.
more than ever in these days of complexity, simplicity underlies the best investment strategies.
Excessive confidence in smooth seas can blind us to the risk of storms.
we cannot afford to let the apocalyptic possibilities frighten us away from the markets. For without risk there is no return.
Chance is asked for his advice: Chance shrank. He felt the roots of his thoughts had been suddenly yanked out of their wet earth and thrust, tangled, into the unfriendly air. He stared at the carpet. Finally, he spoke: “In a garden,” he said, “growth has its season. There are spring and summer, but there are also fall and winter. And then spring and summer again. As long as the roots are not severed, all is well and all will be well.”
Even in the darkest days of the Great Depression, faith in the future has been rewarded.
I hope to show that the historical data support one conclusion with unusual force: To invest with success, you must be a long-term investor. The stock and bond markets are unpredictable on a short-term basis, but their long-term patterns of risk and return have proved durable enough to serve as the basis for a long-term strategy that leads to investment success.
We are not able to control our investment returns, but a long-term investment program, fortified by faith in the future, benefits from careful attention to those elements of investing that are within our power to control: risk, cost, and time.
