John C. Bogle quotes

On the prospects of buying just the winners, or the best funds:

“Don’t look for the needle in the haystack. Just buy the haystack!”
— John C. Bogle

“Fund investors are confident that they can easily select superior fund managers. They are wrong.”
— John C. Bogle

On keeping it simple and avoiding speculative trading:

“Investor emotions plus fund industry promotions equals trouble.”
— John C. Bogle

“The greatest Enemies of the Equity investor are Expenses and Emotions.”
— John C. Bogle

“Owning the stock market over the long term is a winner’s game, but attempting to beat the market is a loser’s game.”
— John C. Bogle

On distinguishing investing from speculating:

“Don’t think that you know more than the market; no one does. And don’t act on insights that you think are your own but are usually shared by millions of others.”
— John C. Bogle

In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses.
— John C. Bogle

“Speculation leads you the wrong way. It allows you to put your emotions first, whereas investment gets emotions out of the picture.
— John C. Bogle

“The stock market is a giant distraction to the business of investing.”
— John C. Bogle

“Ask yourself: Am I an investor, or am I a speculator? An investor is a person who owns business and holds it forever and enjoys the returns that U.S. businesses, and to some extent global businesses, have earned since the beginning of time. Speculation is betting on price. Speculation has no place in the portfolio or the kit of the typical investor.”
— John C. Bogle

“What may work for the few cannot work for the many.”
— John C. Bogle

“Simply buy … a total stock market index fund. Then, once you have bought your stocks, get out of the casino—and stay-out!”
— John C. Bogle

On the miracle of compounding returns, and the tyranny of compounding costs:

“Where returns are concerned, time is your friend. But where costs are concerned, time is your enemy.”
— John C. Bogle

“The miracle of compounding returns is overwhelmed by the tyranny of compounding costs.”
— John C. Bogle

On the certainty that investors, as a whole, earn the market return:

“Returns earned in the stock market must equal the gross returns earned by all investors in the market.”
— John C. Bogle

“Before costs, beating the market is a zero-sum game. After costs, it is a loser’s game.”
— John C. Bogle

On chasing yesterday’s performers verses focusing on lowest possible costs:

“Fund performance comes and goes. Costs go on forever.”
— John C. Bogle

“The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently. I don’t even know anybody who knows anybody who has done it successfully and consistently.”
— John C. Bogle

“Of 1,028 stock recommendations made by the typical brokerage firm during the first quarter of 2001 (the peak of the bull market), only 7 were ‘sell’ recommendations.”
— John C. Bogle

“Mutual fund investors, too, have inflated ideas of their own omniscience. They pick funds based on the recent performance superiority of fund managers, or even their long-term superiority, and hire advisers to help them do the same thing. But, the advisers do it with even less success (see Chapters 8, 9, and 10). Oblivious of the toll taken by costs, fund investors willingly pay heavy sales loads and incur excessive fund fees and expenses, and are unknowingly subjected to the substantial but hidden transaction costs incurred by funds as a result of their hyperactive portfolio turnover. Fund investors are confident that they can easily select superior fund managers. They are wrong.”
— John C. Bogle

“The two greatest enemies of the equity fund investor are expenses and emotions.”
— John C. Bogle

“If you’re very talented and keep winning, you’ll do just fine. It may take a while. But the talent is hard to identify and talent is hard to tell from luck. There’s an awful lot of luck in this business. Past performance is not helpful in judging future performance.”
— John C. Bogle

“Hint: money flows into most funds after good performance, and goes out when bad performance follows.
— John C. Bogle

On the importance of sticking to your plan, no matter what happens:

“The winning formula for success in investing is owning the entire stock market through an index fund, and then doing nothing. Just stay the course.”
— John C. Bogle

“In the mutual fund industry, for example, the annual rate of portfolio turnover for the average actively managed equity fund runs to almost 100 percent, ranging from a hardly minimal 25 percent for the lowest turnover quintile to an astonishing 230 percent for the highest quintile. (The turnover of all-stock-market index funds is about 7 percent.)”
— John C. Bogle

“The historical data support one conclusion with unusual force: To invest with success, you must be a long-term investor.”
— John C. Bogle

“Don’t do something—just stand there.”
— John C. Bogle

“When you have identified your long-term objectives, defined your tolerance for risk, and carefully selected an index fund or a small number of actively managed funds that meet your goals, stay the course. Hold tight. Complicating the investment process merely clutters the mind, too often bringing emotion into a financial plan that cries out for rationality. I am absolutely persuaded that investors’ emotions, such as greed and fear, exuberance and hope—if translated into rash actions—can be every bit as destructive to investment performance as inferior market returns. To reiterate what the estimable Mr. Buffett said earlier: “Inactivity strikes us as intelligent behavior.”
— John C. Bogle

“Buying funds based purely on their past performance is one of the stupidest things an investor can do.”
— John C. Bogle

“The courage to press on regardless–regardless of whether we face calm seas or rough seas, and especially when the market storms howl around us–is the quintessential attribute of the successful investor.”
— John C. Bogle

Responsibility:

“In 1950, individual investors held 92 percent of U.S. stocks and institutional investors held 8 percent. The roles have flipped, with institutions, now holding 70 percent, predominating, and individuals, now holding 30 percent, playing a secondary role. Simply put, these institutional agents now collectively hold firm voting control over Corporate America.”
— John C. Bogle

“I will create value for society, rather than extract it.”
— John C. Bogle

“On balance, the financial system subtracts value from society.”
— John C. Bogle

On Expenses:

“The grim irony of investing is that we investors as a group not only don’t get what we pay for, we get precisely what we don’t pay for.”
— John C. Bogle

In other words, every dollar you don’t pay to an active manager is a dollar of return that belongs to you, not the manager. Reality turns out to be just the opposite of the adage: “You get what you pay for.”

Market timing:

“The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently.”
— John C. Bogle

Trading volume:

“Graham’s timeless lesson for the intelligent investor, as valid today as when he prescribed it in his first edition, is clear: “the real money in investment will have to be made—as most of it has been made in the past—not out of buying and selling but of owning and holding securities, receiving interest and dividends and increases in value.”
— John C. Bogle

“In recent years, annual trading in stocks — necessarily creating, by reason of the transaction costs involved, negative value for traders — averaged some $33 trillion. But capital formation — that is, directing fresh investment capital to its highest and best uses, such as new businesses, new technology, medical breakthroughs, and modern plant and equipment for existing business — averaged some $250 billion. Put another way, speculation represented about 99.2% of the activities of our equity market system, with capital formation accounting for 0.8%.”
— John C. Bogle

Paul Merriman restated simply, John Bogle is saying this: More than 99% of the activity on Wall Street essentially amounts to pushing poker chips around the table, with less than 1% aimed at creating new poker chips. That’s a sad commentary on this huge industry.

Index funds:

Index funds eliminate the risks of individual stocks, market sectors and manager selection, leaving only stock market risk.”
— John C. Bogle

Investing simplified:

“Investing is not nearly as difficult as it looks. Successful investing involves doing a few things right and avoiding serious mistakes.”
— John C. Bogle

Time and patience:

“Time is your friend; impulse is your enemy.”
— John C. Bogle

“If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.”
— John C. Bogle

Owning Bonds:

“Your bond position should equal your age, with the remainder in stocks.”
— John C. Bogle

It was never intended to be more than a rule of thumb, a place to begin your thought process.

Trusting brokers:

“It’s amazing how difficult it is for a man to understand something if he’s paid a small fortune not to understand it.”
— John C. Bogle

Basic Investing Knowledge:

“An investment in knowledge always pays the best interest. Learning is to the Studious, and Riches to the Careful. If a man empties his purse into his head, no man can take it away from him.”
— John C. Bogle

Keep It Simple:

“When there are multiple solutions to a problem, choose the simplest one.”

The Source Of Investment Returns:

“for the stock market, corporate earnings and dividends; for the bond market, interest payments. Market returns, however, are calculated before the deduction of the costs of investing, and are most assuredly not based on speculation and rapid trading, which do nothing but shift returns from one investor to another. For the long-term investor, returns have everything to do with the underlying economics of corporate America and very little to do with the mechanical process of buying and selling pieces of paper. The art of investing in mutual funds, I would argue, rests on simplicity and common sense.”
— John C. Bogle

“Successful investing is about owning businesses and reaping the huge rewards provided by the dividends and earnings growth of our nation’s – and, for that matter, the world’s – corporations.
— John C. Bogle

“Rely on the ordinary virtues that intelligent, balanced human beings have relied on for centuries: common sense, thrift, realistic expectations, patience, and perseverance.
— John C. Bogle

On Corporate Governance:

“Among my greatest disappointments about the mutual fund industry – in addition to excessive costs and excessive focus on the short-term – is that fund managers have been passive participants in corporate governance.
— John C. Bogle

On Exchange Traded Funds (ETFs):

“Now you can trade the S&P 500 Index in real time” was the slogan in the newspapers for the first ETF. What kind of nut would do that?”
— John C. Bogle

On Reversion To The Mean:

“It’s very difficult for any particular segment of the stock market to sustain superior performance. The watch word for our financial markets is, “reversion to the mean” i.e. what goes up must come down, and it’s true more often than you can imagine.”
— John C. Bogle

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