Markets are unpredictable and investment trends come and go. Already in 2021, we have seen speculative behavior around AMC and GameStop and overheated trading based on sentiment rather than fundamentals. At Vanguard, we believe you can stay on the road to long-term financial success by avoiding trends and focusing on balance, discipline and diversification.
In his new book, More Straight Talk on Investing: Lessons for a LifetimeJack Brennan, former Vanguard CEO, provides a timely antidote to today’s headlines. He shows — in a simple, straightforward way — how to develop a sound investment program for the long term, evaluate funds and ETFs (exchange-traded funds), and manage risk and taxes.
He also outlines 12 timeless principles that have helped countless investors like you navigate the financial markets. Below are 5 of those enduring lessons learned through interactions and partnerships with Vanguard crews with customers around the world.
5 principles to guide you on your financial journey
You cannot control the performance of the market, the economy, or personal security. However, you can give yourself the best chance for investment success by taking ownership of your finances wisely.
Develop a Financial Game Plan
First, establish clear, attainable goals and create a plan that will help you reach them. Be conservative in your estimates of how fast your money will grow. By avoiding impractical savings or spending requirements, you can help keep your plan on track.
be a disciplined saver
The 4 key words for building a secure financial future are “living below your means.” Make a habit of withdrawing money. If saving money doesn’t come naturally to you, find creative ways to make it a fun challenge. Consider what changes you’re willing to make to set aside something a little more for your future.
Invest with balance and diversification
Build a good investment strategy by choosing the asset allocation you use widely diversified fund and considers your goals, time horizon and risk tolerance.
control your costs
While you can’t control the markets, you can can do Control your investment costs and taxes.
The less you pay for the fund, the higher your share of the investment return. Be sure to avoid funds with high expense ratios. The average Vanguard mutual fund and ETF expense ratio is 83% below the industry average.*
maintain a long-term outlook
Over time, both of you will experience good and challenging times which can generate different emotions. Resist the urge to make impulsive decisions. Adopting a disciplined approach that keeps you focused on your long-term objectives is a winning strategy for all seasons.
If you want to take a closer look more straightforward talk on investingYou can buy the book at ville.com for 30% off using code MST2E.
Copies are also available at regular prices through Amazon and other retail booksellers.
All proceeds from the book will be donated to the Vanguard Strong Start for Kids™ Program, the firm’s signature charitable initiative that invests in tomorrow by supporting the growth, learning, and joy of today’s young children.
Vanguard is not affiliated with wiley.com or Amazon.
*Vanguard Average ETF and mutual fund expense ratio: 0.09%. Industry average ETF and mutual fund expense ratio: 0.54%. All averages are asset-weighted. The industry averages out Vanguard. Source: As of December 31, 2020 Vanguard and Morningstar, Inc.
**When making withdrawals from an IRA before age 59½, you may have to pay ordinary income tax and a 10% federal penalty tax.
For more information about the Vanguard Fund or Vanguard ETF, visit vanguard.com to obtain the prospectus or, if available, the summary prospectus. The investment objectives, risks, fees, expenses, and other important information about a fund are contained in the prospectus; Read it carefully and consider before investing.
You should buy and sell Vanguard ETF shares through Vanguard Brokerage Services (we offer them commission free) or any other broker (who may charge a commission). see Vanguard Brokerage Service Commission and Fee Program For complete details. Vanguard ETF shares are not directly redeemable with the issuing fund except in large aggregations of millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market value, which may be higher or lower than the net asset value.
All investments are subject to risk, including the potential loss of the money you have invested. Diversification does not ensure profit nor protect against loss.
Jack Brennan joined Vanguard in 1982 and served as chief executive officer from 1996 to 2008 and chairman of the board from 1998 to 2009. Presently, he serves as Chairman Emeritus and Senior Advisor. He has been in the investment management business for almost 40 years.
John Worth is a senior communications consultant, most recently leading Vanguard’s public relations and strategic communications functions. He has held several communications positions since joining the company in 1986. John assisted in updating Brennan’s new book, and he accompanied Vanguard founder John C. Bogle also helped.
“5 Investment Principles That Are Built to Last”handjob