I believe that the mutual fund industry's biggest shortcoming is too much focus on the momentary price of a stock - an illusion - and too little focus on the intrinsic value of the corporation - the ultimate reality. I'm comforted by the fact that Warren Buffett feels the same way.
John C. BogleIndex funds eliminate the risks of individual stocks, market sectors, and manager selection. Only stock market risk remains.
John C. BogleIf it is hard to imagine that 20% of losses on the stock market, you should never participate
John C. BogleIncome earned by the sweat of your brow should be taxed at the lowest rates, not the highest. Capital gains should be taxed at a higher rate.
John C. BogleWhile I haven't read economist Robin Hahnel's work, replacing capitalism would be at the very bottom of my list of priorities - to be considered only after everything else had been tried. Improving our capitalistic system however, is at the top of my list and is of course the major theme of "The Battle for the Soul of Capitalism."
John C. BogleHint: money flows into most funds after good performance, and goes out when bad performance follows.
John C. BogleYou know the rule of 72, divide the number into 72, any number you want, and that's how long it will take your money to double.
John C. BogleI'm not currently into economic textbooks, but my grandchildren tell me that the book by Gregory Mankiw, former head of the white house council of economic advisers is a model of intelligence and clarity. Why not try that one.
John C. BogleThe general systems of money management today require people to pretend to do something they can't do and like something they don't. It's a funny business because on a net basis, the whole investment management business together gives no value added to all buyers combined. That's the way it has to work. Mutual funds charge two percent per year and then brokers switch people between funds, costing another three to four percentage points. The poor guy in the general public is getting a terrible product from the professionals.
John C. BogleWe need a mutual fund industry with both vision and values; a vision of fiduciary duty and shareholder service, and values rooted in the proven principles of long-term investing and of trusteeship that demands integrity in serving our clients.
John C. BogleI think we all ought to be careful about too much generalization on this issue, even as I confess to painting with a pretty broad brush myself!
John C. BogleThe returns we read about in the industry sales literature vastly diminish when we move from the theoretical world of market indexes to the real world of actually investing.
John C. BogleThomas Aquinas defined the human soul as the core of our being, and the power that brings our characteristics into unity so the soul of capitalism - in its own temporal world as contrasted to the spiritual world of human beings - is what defines the core of the system and the factors that unify to produce the wonderful world that we are blessed to live in.
John C. Bogle"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. BogleThe grim irony of investing, then, 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. So if we pay for nothing, we get everything.
John C. BogleI would always advise young people to follow their star - not my star. They have to live their own life. If they decide they want to go into the investment business, do it, but make it a better business than it is today.
John C. BogleSure there are some companies at the margins of our society that probably do that and I think we all have the responsibility as consumers and as investors to avoid them like the plague. If we do, they won't last very long. Doing what's right is the only possible formula for long-term - I emphasize long term - business success.
John C. BogleSuccessful 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. BogleWithout getting into brothels, there are ethical capitalists the problem is that there aren't enough of them. It is not "just a few bad apples" that have been evident in our corporations, our investment bankers and our mutual funds, but so many that one has to concede that the barrel itself needs some work.
John C. BogleSurprise! The returns reported by mutual funds aren't actually earned by mutual fund investors.
John C. BogleAmong 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. BogleThe 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. BogleMy biggest prediction for the future is that people are going to start looking after individual investors.
John C. BogleYour success in investing will depend in part on your character and guts, and in part on your ability to realize at the height of ebullience and the depth of despair alike that this too shall pass.
John C. BogleIt'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. BogleThe business has some problems, substantial problems. You go fix it, you young people. That's what you're there for. Don't believe what the old generation tells you. We don't know a damn thing, including Bogle.
John C. BogleIf you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks.
John C. BogleI think it's fairly easy to provide a moral defense of capitalism. It has been - over the last 200 years - the underlying basis for enormous increases in productivity and human welfare and rising living standards, particularly in the United States, and in the industrialized nations but in fact, in most parts of the world.
John C. BogleI believe that the behavior of too many of our corporations investment bankers and fund managers has jeopardized some of the trust that investors have had. It's not the economic engine that we need to focus on, but the need to make sure that our investors receive their fair share of the returns that that great economic system produces.
John C. BogleFund investors are confident that they can easily select superior fund managers. They are wrong.
John C. BogleOur capitalistic scheme in the latter years of the 20th century seems to have lost its way. We've had a "pathalogical change" from traditional owners capitalism where most of the rewards have gone to those who make the investments and assume the risks to a new and deeply flawed system of managers capitalism where the managers of our corporations our investment system, and our mutual funds are simply take too large a share of the returns generated by our corporations and mutual funds leaving the last line investors - pension beneficiaries and mutual fund owners at the bottom of the food chain.
John C. BogleI'm not an expert on Islam, but I think there are lots of noble religions whose basic principles could stand considerably more observation in the world of business.
John C. BogleThe miracle of compounding returns has been overwhelmed by the tyranny of compounding costs.
John C. BogleThe mistakes we make as investors is when the market's going up, we think it's going to go up forever. When the market goes down, we think it's going to go down forever. Neither of those things actually happen. Doesn't do anything forever. It's by the moment.
John C. BogleIt'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. BogleThe idea that a bell rings to signal when investors should get into or out of the stock market is simply not credible. After nearly fifty 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. Yet market timing appears to be increasingly embraced by mutual fund investors and the professional managers of fund portfolios alike.
John C. Bogle