Bogleheads® Conference 2010 - Jack Bogle on Investing: The Essentials
00:00:00.000 | We're here at BogleHeads9 with our mentor, Jack Bogle.
00:00:10.500 | Jack, thanks for speaking with us.
00:00:13.120 | Always my treat, thank you.
00:00:14.560 | One of the striking things that I heard you say at one of my first meetings was that you
00:00:20.240 | could teach just about everything about investing in just a few minutes.
00:00:24.760 | If I were to put you in front of every single person in the country for those few minutes,
00:00:29.600 | what would you say to them?
00:00:31.440 | Well I'd say first, invest you must.
00:00:33.240 | If you don't put money away, you'll end up with nothing.
00:00:35.760 | Pretty clear.
00:00:36.760 | How to invest, don't make it any more complicated than it is, own the stock market and own the
00:00:43.720 | bond market.
00:00:44.720 | And you can own the stock market through an old market index fund, you can own the bond
00:00:48.720 | market through an old bond market index fund, and that's the most sensible way to invest.
00:00:53.600 | And you have to figure out kind of for yourself, if you're young you want to be very heavily
00:00:57.360 | towards stocks.
00:00:58.360 | If you're old and you've got more wealth, less appetite for risk, need income more,
00:01:03.000 | you want to lean, tilt heavily to bonds, it's a lifetime asset allocation struggle.
00:01:09.320 | And just make sure the funds you buy are low cost, don't pay sales loads, watch out for
00:01:14.440 | funds that have high turnovers, index funds do not.
00:01:18.040 | Make sure you have very, very low cost, operating cost, and zero management cost, which you
00:01:23.600 | do in an index fund.
00:01:25.240 | And then be careful of tax efficiency, because trading is very expensive, you pay taxes and
00:01:30.840 | that devastates long term investment returns.
00:01:33.860 | So it's the bond market and the stock market, get the cost out of the equation.
00:01:38.240 | And I guess my final piece of advice would be, don't peek, just put your money away month
00:01:44.360 | after month after month after month, and don't look.
00:01:48.420 | And if you start when you're 20 and retire when you're 80, which I'm thinking about doing
00:01:54.280 | but haven't decided to do it yet, and you see what that account is worth in 60 years,
00:01:58.920 | you aren't going to believe it.
00:02:00.800 | Throw everything else out along the way.
00:02:03.360 | That sounds like fantastic advice.
00:02:05.680 | So when you're tempted to peek, or even worse, when you're tempted to do something in response
00:02:11.520 | to everything else that's going on, what should we do?
00:02:14.080 | How do we avoid that?
00:02:15.600 | Well there's this great sort of American ethic that we can always win, and the great statement
00:02:22.480 | is, don't just stand there, do something.
00:02:26.260 | And my advice is, don't do something, just stand there.
00:02:30.920 | Because we get most excited and most depressed and most likely to sell when the market's
00:02:36.200 | at a low, and we get most elated and most optimistic when the market's at a high.
00:02:42.160 | When the market's at a low, you're tempted therefore to sell.
00:02:44.920 | When the market's at a high, you're tempted to buy.
00:02:47.520 | So don't try and tie in the market.
00:02:50.440 | I've often said that I don't know how to tie in the market.
00:02:54.160 | I don't know anybody who's ever been able to tie in the market successfully, and I don't
00:02:58.320 | even know anybody who knows anybody that's tied in the market successfully.
00:03:02.160 | That's a lot of people.
00:03:03.160 | One last thing.
00:03:06.200 | Your career spans 60 years, and you've done a lot of amazing things and achieved quite
00:03:12.440 | a bit in that time.
00:03:14.120 | Maybe 60 years from now, what would you want people to remember about you or remember about
00:03:21.960 | your accomplishments or achievements?
00:03:23.960 | I don't spend a lot of time thinking about that.
00:03:27.440 | But it would be something like, he was an ordinary person who did his best.
00:03:33.720 | How about that?
00:03:35.400 | Thank you.
00:03:36.840 | Thank you.
00:03:37.840 | Thank you.
00:03:37.840 | Thank you.