Vanguard's investment philosophy

From Bogleheads

Vanguard's investment philosophy is based on four simple principles:[1]

  1. Define clear goals,
  2. Invest with balance and diversification,
  3. Minimize cost, and
  4. Stay disciplined over the long term.

Vanguard's investment guidance

Vanguard explains its investment guidance in separate articles:

Principle 1 - Create clear, appropriate investment goals.[2]
Your investment goals should be measurable and attainable. Success should not depend upon outsize investment returns, or on impractical saving or spending requirements.
Principle 2 - Develop a suitable asset allocation using broadly diversified funds.[3]
A sound investment strategy starts with an asset allocation suitable for your portfolio's objective. You should build your allocation on reasonable expectations for risk and returns, using diversified investments to avoid exposure to unnecessary risks.
Principle 3 - Minimize cost. Markets are unpredictable. Costs are forever.[4]
The lower your costs, the greater your share of an investment's return. Research suggests that lower-cost investments have tended to outperform higher-cost-alternatives. To hold on to even more of your return, manage for tax efficiency. You cannot control the markets, but you can control losses to costs and taxes.
Principle 4 - Maintain perspective and long-term discipline.[5]
Investing can provoke strong emotions. In the face of market turmoil, you may find yourself making impulsive decisions or, conversely, becoming paralyzed and unable to implement an investment strategy or to rebalance your portfolio. Discipline and perspective are the qualities that can help you remain committed to your long-term investment programs through periods of market uncertainty.

References

  1. ↑ "Vanguard's Principles for Investment Success". Vanguard. 2014. Archived from the original on February 5, 2015.
  2. ↑ "Principle 1: Create clear, appropriate investment goals". Vanguard. 2014. Archived from the original on July 19, 2014.
  3. ↑ "Principle 2: Develop a suitable asset allocation using broadly diversified funds". Vanguard. 2014. Archived from the original on July 19, 2014.
  4. ↑ "Principle 3: Minimize cost". Vanguard. 2014. Archived from the original on December 31, 2014.
  5. ↑ "Principle 4: Maintain perspective and long-term discipline". Vanguard. 2014. Archived from the original on July 19, 2014.

External links

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