I would always advise young people to follow their star - not my star. They have to live their own life. If they decide they want to go into the investment business, do it, but make it a better business than it is today.
John C. BogleRead
We make too much out of past performance, and it's very misleading to investors. It causes them to move money around. They buy a fund that's hot and then it turns cold as all hot funds eventually do. And then they get out. Well, buying at the high and selling at the low isn't going to leave you a satisfied shareholder, right?
Interpretation
Past performance may mislead investors, leading to poor investment decisions.
John C. Bogle emphasizes the dangers of overvaluing past performance in investments. He argues that investors often make hasty decisions based on the recent success of a fund, only to find that the market fluctuates and their returns suffer as they buy high and sell low. This cycle ultimately leaves them dissatisfied with their investments.
In practice
In a financial seminar, quoting Bogle can illustrate the importance of long-term investment strategies.
I would always advise young people to follow their star - not my star. They have to live their own life. If they decide they want to go into the investment business, do it, but make it a better business than it is today.
When our financial system - essentially our money managers, marketers of investment products and stockbrokers - put up zero percent of the capital and assume zero percent of the risk yet receive fully 80% of the return, something has gone terribly wrong in our financial system.
Entrepreneurs or international conglomerateurs, or large financial institutions buy or create mutual fund management companies to create a return on their own capital. It's capitalism at work, where the rewards tend to go to the managers rather than the investors.
Net return is simply the gross return of your investment portfolio less the costs you incur. Keep your investment expenses low, for the tyranny of compounding costs can devastate the miracle of compounding returns.
Investing is a virtuous habit best started as early as possible.
Wise investors won't try to outsmart the market.
If you owe $50, you're a delinquent account. If you owe $50,000, you're a small businessmen. If you owe $50 million, you're a corporation. If you owe $50 billion, you're the government.
Nobody can predict interest rates, the future direction of the economy or the stock market. Dismiss all such forecasts and concentrate on what's actually happening to the companies in which you've invested
It's difficult to make your clients understand that there are certain days that the market will go up or down 2%, and it's basically driven by algorithms talking to algorithms. There's no real rhyme or reason for that. So it's difficult. We just try to preach long-term investing and staying the course.
Don't try to buy at the bottom and sell at the top. It can't be done except by liars.
I'll always understand the Schadenfreude aspect to short-selling. I get that no one will always like it. I'm also convinced to the deepest part of my bones that short-selling plays the role of real-time financial watchdog. It's one of the few checks and balances in the market.
The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient.
Subscribe for the occasional hand-picked quote. No noise.