Wise Words

May 20, 2022

Above is the annualized performance of SPY (S&P 500. Earliest available goes back 30-years).

The late Jack Bogle, founder of the Vanguard Group and one of the world’s greatest investors:

In the long run, there is a high correlation between the stock market and U.S. economic growth, he said. So, even when the situation is volatile, “stay the course. Don’t let these changes in the market, even the big ones, change your mind and never, never, never trade in and out of the market. Always be in at a certain allocation.”

If you try to trade in and out of the market, “your emotions will defeat you totally,” Bogle added. “Short-term betting is not a good way to go.”

Smart investing is “all about common sense and discipline,” Bogle preached. Having a diversified portfolio for the long term is a winner’s game. Trying to beat the stock market is theoretically a zero-sum game (for every winner, there must be a loser), and after letting emotions dictate your decisions, it becomes a loser’s game.