Bogleheads

[pkcrafter]

BACK TO BASICS WITH JACK BOGLE - PILLAR 2

The Vanguard Diehards forum has a well-earned reputation as one of the best investment resources on the internet because of it’s long history of attracting and helping newer, inexperienced investors. The seeds of success have grown from the fundamental teachings of our mentor, Jack Bogle. I feel our mission has been, and continues to be, to pass along the wisdom of Mr. Bogle.

In recent years, the forum has also attracted more knowledgeable investors who enjoy discussing sophisticated ways to reduce risk and/or increase investing returns. This is interesting and educational for knowledgeable and experienced investors. However, our advanced discussions are sometimes confusing and possibly even overwhelming for newbies and less-experienced investors. As a result of these more sophisticated conversations (about which experts often disagree), it is not unusual to see new investors with a few thousand dollars trying to start with complicated slice-and-dice portfolios.

I discussed this problem with Mel and Taylor with the idea that the best way to help new and less sophisticated investors would be to post a series of conversations that will bring us back to Jack Bogle's common sense, easy-to-understand ways to invest successfully. Mel and Taylor agreed and suggested I review each of Jack's "12 Pillars of Wisdom."

The 12 Pillars were originally published in 1994 as an Epilogue in Mr. Bogle's first book, Bogle on Mutual Funds. I will post a series of conversations featuring each of Mr. Bogle's "Twelve Pillars of Wisdom" for the benefit of our new and less-experienced investors. Replies are encouraged but please keep on topic.

Pillar 2. When All Else Fails, Fall Back on Simplicity.

There are an infinite number of strategies worse than this one: Commit, over a period of a few years, half of your assets to a stock index fund and half to a bond index fund. Ignore interim fluctuations in their net asset values. Hold your positions for as long as you live, subject only to infrequent and marginal adjustments as your circumstances change. When there are multiple solutions to a problem, choose the simplest one.

Link to Previous Post - Pillar 1.
http://www.diehards.org/forum/....57a5f47ba9


Paul
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[bob90245]

[unclemick]

Hmmm

Defensive Investor chapter, The Intelligent Investor, 4th ed by Ben Graham. ?1972?

50/50 500Index/GIC(guaranteed insurance contracts) - unclemick's 401k 1977 to 1993.

Thanks Ben and Jack for my successful early retirement at age 49! Add in the rest of the Vanguard crew for keeping me there (lifestrategy, and then target). 1994 Bogle on Mutual Funds, rollover to Lifestrategy moderate about 95, Target about 2006.

heh heh heh - yep Pillar 2 is a good one.

[Taylor Larimore]

Hi Paul:

Each of Mr. Bogle's "Twelve Pillars" contain a valuable lesson about how to invest successfully.

"Simplicity" changed my life and is my favorite "Pillar." This is what I wrote about it:

http://socialize.morningstar.c....vSeq=32713

Best wishes.
Taylor

[ryan]

Posting these Pillars is such a great idea. Keep'em coming!

[fundtalker123]

Bogle has also said 100-(your age) = % to invest in stocks is a pretty simple rule of thumb if you want more/less than 50/50 stocks.

[YDNAL]

Paul,
Thanks for your contribution.

I just celebrated my 1-year anniversary with Vanguard using a 'keep it simple' approach after 30+ years of performance chasing [I want to forget 2000-2002], constant tweaking, individual stocks and the other pitfalls attributable to most investors.... Diehards are the minority, you know.

Keep them coming.

Regards,
Landy dba YDNAL

[660ky612]

YDNAL wrote:

>I just celebrated my 1-year anniversary with Vanguard using a 'keep it simple' approach after 30+ years of performance
>chasing [I want to forget 2000-2002], constant tweaking, individual stocks and the other pitfalls attributable to most
>investors.... Diehards are the minority, you know.

30 years performance chasing? Would you mind share your story of why it doesn't work, possibly in another thread?
Write a private mail to me if necessary.

Best Wishes,

660ky612 from HKSAR

[YDNAL]

660ky612,
You mis-read my quote:

[dcd]

Thanks for these posts. Concentrating on the basics really helps me "behave" better.
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Denny