"Warren Buffett and Jack Bogle agree on the formula for long-term success: 'Buy and hold' "

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Taylor Larimore
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"Warren Buffett and Jack Bogle agree on the formula for long-term success: 'Buy and hold' "

Post by Taylor Larimore » Tue Sep 18, 2018 4:07 pm

Bogleheads:

For anyone who still believes in market-timing, this article should be of interest:

Warren Buffett and Jack Bogle agree on the formula for long-term success: 'Buy and hold'

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: "Warren Buffett and Jack Bogle agree on the formula for long-term success: 'Buy and hold' "

Post by abuss368 » Tue Sep 18, 2018 6:15 pm

Two investing greats that we all can learn from!
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: "Warren Buffett and Jack Bogle agree on the formula for long-term success: 'Buy and hold' "

Post by Grt2bOutdoors » Tue Sep 18, 2018 6:20 pm

Warren Buffett is known for exiting out of positions. He does not just “buy and hold”. People will exit out of positions for the simple fact, they need money to live their life.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: "Warren Buffett and Jack Bogle agree on the formula for long-term success: 'Buy and hold' "

Post by nisiprius » Tue Sep 18, 2018 6:36 pm

Taylor probably has a long list of "gems" on the subject, but I think I'll add what Jeremy Siegel has said in Stocks for the Long Run 5/E. The boldfacing is mine. These are from chapter 15, "Stocks and the Business Cycle."
If you can predict the business cycle, you can beat the buy-and-hold strategy that has been advocated throughout this book.
But, as he says later,
The record of predicting business cycle turning points is extremely poor
and then spends sixteen paragraphs giving details of failure after failure after failure. He concludes the chapter (my boldfacing)
Jeremy Siegel wrote:The worst course an investor can take is to follow the prevailing sentiment about economic activity. That will lead investors to buy at high prices when times are good and everyone is optimistic and sell at the low.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: "Warren Buffett and Jack Bogle agree on the formula for long-term success: 'Buy and hold' "

Post by staythecourse » Tue Sep 18, 2018 6:52 pm

nisiprius wrote:
Tue Sep 18, 2018 6:36 pm
Taylor probably has a long list of "gems" on the subject, but I think I'll add what Jeremy Siegel has said in Stocks for the Long Run 5/E. The boldfacing is mine. These are from chapter 15, "Stocks and the Business Cycle."
If you can predict the business cycle, you can beat the buy-and-hold strategy that has been advocated throughout this book.
But, as he says later,
The record of predicting business cycle turning points is extremely poor
and then spends sixteen paragraphs giving details of failure after failure after failure. He concludes the chapter (my boldfacing)
Jeremy Siegel wrote:The worst course an investor can take is to follow the prevailing sentiment about economic activity. That will lead investors to buy at high prices when times are good and everyone is optimistic and sell at the low.
Nisi,

That was an excellent post. It sums up the truth. Can you beat the market by active management? Yes. But do most do it? No. The lure of those few that do it is the MOST dangerous for any investor. Overconfidence is one of the most deadly character traits of investors. Likely, one of the reasons those with less education and woman are better investors then those with more advanced education and men.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Taylor Larimore
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Re: "Warren Buffett and Jack Bogle agree on the formula for long-term success: 'Buy and hold' "

Post by Taylor Larimore » Tue Sep 18, 2018 8:52 pm

nisiprius wrote:
Taylor probably has a long list of "gems" on the subject.
nisiprius:

You are right. Here is the list:
Frank Armstrong, advisor and author of The Informed Investor: "Endless tinkering is unlikely to improve performance, and chasing last period's stellar achiever is a losing strategy."

Barber Odean Study: "Of 66,465 households with accounts at a large discount broker during 1991 to 1996, those that trade most earn an annual return of 11.4 percent, while the market returns 17.9 percent. Our central message is that trading is hazardous to your health."

William Bernstein, author of Four Pillars of Investing: If you become upset when one of your asset classes does poorly, even when the rest of your portfolio is doing well, then you should not be managing your own money."

Jack Bogle: "Stay the Course. No matter what happens, stick to your program. I've said "Stay the course" a thousand times, and I meant it every time. It is the most important single piece of investment wisdom I can give to you."

Bogleheads Guide to Investing: "Wall Street can't stand buy-and-hold strategies because brokers need trading activity to make money."

Jack Brennan, former Vanguard CEO: "If you're determined to succeed at investing, make it your first priority to become a buy-and-hold investor."

Warren Buffett: "Inactivity strikes us as intelligent behavior."

"Andrew Clarke, author of Wealth of Experience: "Setting a goal, developing an appropriate asset allocation, and selecting a handful of funds are not hugely complex tasks. The hard part comes next: Battling your emotions so that you can stick with your plan through thick and thin."

Jonathan Clements, author and Wall Street Journal columnist: "Take my word on it. Buy-and-hold is still your best long-run strategy."

Phil DeMuth, adviser and co-author of seven investment books: "The investor says to his adviser: 'Every year you tell me to do nothing. What do I need you for?' The adviser replied: 'Every year you need me to keep your from doing anything.' "

Paul Farrell, author of Lazy Persons Guide to Investing: "In a study of 66,400 Merrill Lynch investors, professors Odean and Barber discovered that buy-and-hold investors beat the more active investors by a fairly sizable margin: 18.5% to 11.4% over a six-year period."

Rick Ferri, advisor and financial author: "Write down your strategy -- and stay-the-course."

Steve Forbes: "Everyone is a long-term investor until the market goes down."

Alan Greenspan, former Chairman of the Federal Reserve: "The best strategy for equity investor has always been buy and hold, and forget it."

Mark Hebner, author of "Index Funds": "Prices change to reflect news which is both random and unpredictable. Stock picking and market timing don't work. Stay the course in a risk-appropriate index portfolio and invest and relax."

Morgan Housel, financial columnist: "Do nothing" are the two most powerful -- and underused -- words in investing. The urge to act has transferred an inconceivable amount of wealth from investors to brokers."

Michael LeBoeuf, author of The Millionaire in You: "Simple buy-and-hold index investing is one of the best, most efficient ways to grow your money to the ultimate goal of financial freedom."

Jessie Livermore, famous stock trader: "The big money is not in the buying or the selling, but in the sitting."

Burton Malkiel, author of Random Walk Down Wall Street: "Buying-and-holding a broad-based market index fund is still the only game in town."

Morningstar video: Bad Timing Costs Investors 2.5% Per Year

Mike Piper, editor of The Oblivious Investor: "One of the most important lessons in investing is that there is no “perfect” portfolio, but there are many “perfectly fine” portfolios. Once you are confident that you have a “perfectly fine” portfolio, just stick with the plan and let the portfolio do what it is meant to do."

Bill Schultheis, author of The Coffeehouse Investor: "42% of millionaires of this country make less than one transaction per year in their investments."

Fred Schwed Jr. author of "Where are the Customers' Yachts? "It turns out that I should have just bought them (securities) and thereafter I should have just sat on them like a fat, stupid peasant."

Chandan Sengupta, author of The Only Proven Road to Investment Success: "If you are not going to stick to your chosen investment method through thick and thin, there is almost no chance of your succeeding as an investor."

Dan Solin, financial author and adviser: "Once you understand that monitoring the markets is harmful to your long-term returns, a whole new world of opportunities will await you."

Larry Swedroe, advisor and financial author: "There are lots of people out there who have something to gain by your taking action instead of your adhering to your well-thought-out plan."

Eric Tyson, author of Mutual Funds for Dummies: "Don't trade in and out of funds. Stay invested. Not only does buy-and-hold investing offer better returns, but it's also less work."

Jason Zweig, financial author and Wall Street Journal columnist: "The ultimate benefits of owning stocks accrue only to those who can buy and hold."
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: "Warren Buffett and Jack Bogle agree on the formula for long-term success: 'Buy and hold' "

Post by Yesterdaysnews » Tue Sep 18, 2018 8:56 pm

Absolutely!

I joke with my friend (who is a high fee type FA with morgan stanley), that if I were in his shoes I would just buy low cost index ETFs for my clients and do nothing. Collect the fees for basically doing nothing and likely outperform most folks over the long-run. Maybe when the market tanks send out comforting email saying everything is going to be ok..... :moneybag

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