Jack Bogle's 10 Rules for Investors Who Are Tired of Losing Money
In August 1976, a 47-year-old executive who had been fired from the company he once ran tried to raise $150 million for a strange new kind of fund.
He raised $11.3 million.
It was not even enough money to buy all 500 stocks the fund was supposed to own, so it started with 280 of them. Wall Street laughed. People called it "Bogle's Folly." A poster made the rounds in the industry, drawn in the style of wartime propaganda, telling investors to help stamp out index funds because they were un-American. The man behind the fund kept a copy outside his office door for years, as a cheerful reminder of how wrong the critics were.
Fifty years later, that "folly" is the Vanguard 500 Index Fund. Across all its share classes it holds about $1.67 trillion. By Morningstar's calculation, $15,000 put into the fund on launch day would be worth more than $3.6 million today.
The man was John Clifton "Jack" Bogle, the founder of Vanguard. When he died in January 2019, Warren Buffett said: "Jack did more for American investors as a whole than any individual I've known."
If you are tired of losing money in the stock market, here is something you need to hear first. You are probably not stupid, and you are probably not unlucky. You have most likely been playing a game whose rules were written for the people who sell you products, not for you.
Jack Bogle wrote down a different set of rules. Ten of them. He laid them out in Chapter 9 of his 2012 book, The Clash of the Cultures: Investment vs. Speculation. They are short. They are plain. And when you put them next to 50 years of hard data, they turn out to be some of the most valuable sentences ever written about money.
In this guide, you will get each rule in plain English, the research that proves it, the true stories behind it, and the exact move to make. Read it slowly. One or two of these rules could be worth more to you than everything a salesman has ever told you.
What you will learn in this guide:
Why Ordinary Investors Keep Losing Money (It Is Not Your Intelligence)
Before we get to the rules, look at the scoreboard. Your losses usually come from two leaks, and both are measured every year.
Leak number one: the professionals. S&P Dow Jones Indices publishes the SPIVA Scorecard, the longest-running referee in the active-versus-index debate. In 2025, 79% of actively managed U.S. large-cap funds failed to beat the S&P 500. Over 20 years, about 93% of them fell short. These are full-time professionals with research teams, and almost all of them lose to a fund that simply buys everything.
Leak number two: us. Morningstar's 2026 Mind the Gap study tracked what investors actually earned in U.S. mutual funds and ETFs over the ten years to December 2025. Because of when they bought and sold, investors earned about 1.2 percentage points a year less than the funds they owned. That quietly erased roughly 12% of the returns they should have had.
Some years are far worse. DALBAR, which has studied investor behavior since 1994, found that in 2024 the average stock fund investor earned 16.54% while the S&P 500 returned 25.02%. On $100,000, that is about $8,500 left on the table in one year, simply from moving money around at the wrong moments.
So the problem is not that the stock market does not work. The market made money in most of those years. The problem is the gap between what the market earns and what ordinary people keep. Bogle spent his whole career attacking that gap, and his 10 rules are the plugs for both leaks.
If you want to understand the psychology behind leak number two, read Why Smart People Lose Money in the Stock Market: 8 Mental Traps and How to Escape Them after this.
Who Was Jack Bogle? The Man Wall Street Called a Fool
Bogle was born in May 1929, a few months before the great crash. He went to Princeton on a scholarship and wrote his senior thesis on mutual funds. That thesis landed on the desk of Walter Morgan, founder of the Wellington Fund, who hired him in 1951.
Bogle rose fast. He had his first heart attack at 31. By 1967 he was running Wellington Management. Then he made a move he would come to regret: a 1967 merger with a group of high-flying Boston money managers. As the 1973 to 1974 bear market battered the business, the partnership fell apart, and in January 1974 Bogle was fired. He liked to joke that he was "fired with enthusiasm."
Instead of leaving, he fought to keep running the funds' administration in a new company. He named it Vanguard, after HMS Vanguard, Admiral Nelson's flagship at the Battle of the Nile in 1798. Vanguard began operating on May 1, 1975, and it had a structure no one else had: the company was owned by its own funds, which meant it was owned by the investors in those funds. There were no outside owners demanding profits from fees.
His inspiration for the index fund came from the Nobel Prize-winning economist Paul Samuelson, who wrote a 1974 essay daring the money-management industry to prove it could beat the market, and suggesting someone should simply track the S&P 500. Bogle did it. In 1977 he went further and stopped selling Vanguard funds through brokers, which meant no more sales charges for investors.
Bogle's heart kept failing. In February 1996, at the age of 66, after months in hospital waiting for a donor, he received a heart transplant. He lived another 23 years, writing books and scolding the industry for overcharging ordinary people. He died on January 16, 2019, aged 89.
Samuelson later ranked Bogle's index fund alongside humanity's great inventions, mentioning it in the same breath as the wheel, the alphabet and the printing press. The market has come around to that view. By the end of 2025, index mutual funds and index ETFs held 52% of all long-term fund assets in the United States, up from just 19% in 2010, according to the Investment Company Institute.
Now, the rules.
Rule 1: Remember Reversion to the Mean
In plain English: what is hot today is very likely to cool down tomorrow. Extreme performance, good or bad, tends to drift back toward the long-term average.
This rule protects you from the most expensive habit in investing: buying whatever just went up the most.
In 1972, Wall Street fell in love with a group of about 50 "one-decision" growth stocks. You bought them, people said, and you never had to sell. They were famous companies like Polaroid, Xerox, Avon and IBM. Polaroid traded at more than 90 times its earnings. Then came the 1973 to 1974 bear market. The S&P 500 lost 14.3% in 1973 and another 25.9% in 1974. Many of the darlings fell far harder, and Polaroid eventually went bankrupt in 2001.
The same pattern shows up in whole decades. Look at what the S&P 500 returned, with dividends, decade by decade.
The 1990s delivered about 18% a year. People who extrapolated that into the future poured money in near the top. The next decade returned slightly less than zero. Over the whole 98 years from 1928 to 2025, the average was about 10% a year. The extremes did not last. The average did.
Fund managers revert to the mean too. S&P's Persistence Scorecard follows the top performers to see if they keep winning. Of 334 U.S. large-cap funds in the top half in 2021, only 4.5% stayed in the top half in every year through 2025. Among the top-quartile funds of 2021, not a single one in any U.S. equity category stayed in the top quartile through 2025.
That is the trap. The fund with the best five-year chart is the one in the newspaper ads, and the one most likely to disappoint you next.
Your Move Never buy a fund or stock because of its recent returns alone. If the main reason you want it is "look how much it went up," treat that as a warning sign, not a buy signal. |
For 20 years of evidence on this, see Stock Picking vs. the S&P 500: What 20 Years of Results Say About Who Actually Wins.
Rule 2: Time Is Your Friend, Impulse Is Your Enemy
In plain English: compounding does the heavy lifting, but only if you leave it alone long enough. Every impulsive move resets the clock.
Bogle loved a simple point. At 7% a year, money doubles roughly every ten years. $10,000 becomes about $19,700 in 10 years, $38,700 in 20 years, $76,100 in 30 years and almost $150,000 in 40 years. Notice that the last ten years add more than the first thirty combined. The reward for patience is back-loaded.
Now take the 1.2-point gap Morningstar measured between what funds earned and what their investors earned. Run the same $10,000 at 5.8% instead of 7%.
After 40 years, the impulsive investor has about $95,000. The patient investor has about $150,000. Same market. Same funds. The difference is roughly $54,000 on every $10,000 invested, and it comes entirely from behavior.
Impulse looks different for everyone. It is selling during a scary headline. It is switching funds after a bad quarter. It is the "small" side bet on a stock your neighbor mentioned. Each move feels reasonable in the moment. Added up over decades, they are devastating.
The Data Behind It DALBAR's 2026 study shows how much behavior swings from year to year. The average stock fund investor trailed the S&P 500 by 8.48 percentage points in 2024, then by only 0.72 points in 2025. The market did not change its nature between those two years. Investor behavior did. |
Your Move Automate your investing. Set up a fixed monthly amount that goes into a broad index fund on the same day every month, whatever the news says. Automation removes the moment where impulse gets a vote. |
To see what steady monthly investing can grow into, read What $500 a Month in an S&P 500 Index Fund Becomes After 10, 20 and 30 Years.
Rule 3: Buy Right and Hold Tight
In plain English: choose a sensible mix of stocks and bonds that you can live with in a bad year, then stick to it no matter how greedy or scared you feel.
"Buying right" means getting the mix right before the storm, not during it. Bogle's well-known rule of thumb was to hold roughly your age in bonds, so a 60-year-old might start near 60% bonds and 40% stocks. He treated it as a starting point to adjust for your situation, not a law. The deeper idea is this: if a 30% fall in stocks would make you sell, you own too many stocks.
"Holding tight" is where the money is made. The best real-world test came in the 2008 to 2009 financial crisis. Fidelity studied millions of 401(k) retirement accounts to see what happened to people who sold everything when stocks fell hardest, between October 2008 and March 2009.
By mid-2011, people who kept their stock allocation had grown their accounts by an average of 50%. Those who sold everything but later came back were up 25%. Those who sold everything and stayed out were up just 2%. Fidelity also found that people who kept making contributions through the crash were up 64%, compared with 26% for those who stopped.
The people who sold were not foolish. They were frightened, and fear is a perfectly human reaction to watching your savings shrink. That is exactly why the mix has to be decided before the fear arrives.
Your Move Write a one-page investment plan today. Include your stock and bond mix, how much you invest each month, and one sentence that starts with "When the market falls 30%, I will..." Sign it. Read it every time you feel the urge to act. |
If the market is falling as you read this, please read The Market Just Dropped 20%. Here's What Calm Investors Do Next before you touch anything.
Rule 4: Have Realistic Expectations (the Bagel and the Doughnut)
In plain English: count on the returns that real businesses produce. Treat anything extra as a bonus, not a plan.
This is one of Bogle's cleverest ideas, and it can save you from almost every get-rich-quick pitch you will ever hear. He split stock market returns into two parts.
The first part is the investment return: the dividend yield you collect today plus the growth in company earnings. This is the bagel. It is solid food, produced by real businesses selling real products.
The second part is the speculative return: the change in how much investors are willing to pay for each dollar of earnings, measured by the price-to-earnings ratio. This is the doughnut. It is sweet, it is mostly air, and it swings with the crowd's mood.
In a 2015 paper with Michael Nolan in the Journal of Portfolio Management, Bogle measured both parts for U.S. stocks from 1871 to 2014. Investment return averaged 8.6% a year. Speculative return averaged just 0.4%. Over the long run, almost all the money came from the bagel.
Here is an honest footnote that proves the point. In that same 2015 paper, Bogle expected stocks to return around 6% a year over the following decade. He was too gloomy. From 2016 to 2025, the S&P 500 returned about 14.7% a year, largely because investors became willing to pay much higher prices for earnings. That was the doughnut, and you cannot plan on the doughnut. It can just as easily shrink. Ask anyone who bought in 1999 and waited through the 2000s.
Warning Sign Anyone who promises you 20%, 30% or 50% a year is selling you the doughnut. The U.S. stock market's 98-year average is about 10% a year before inflation, taxes and fees, and it got there through some brutal years. A sensible plan assumes less than that, not more. |
Your Move Build your retirement plan on a modest return, such as 5% to 6% a year before inflation for a stock-heavy portfolio. If the market does better, you retire earlier or richer. If it does worse, your plan still holds. |
If you suspect your own expectations have drifted, check yourself against 7 Signs You're Gambling in the Stock Market, Not Investing.
Rule 5: Forget the Needle, Buy the Haystack
In plain English: stop trying to find the one great stock. Own the whole market and you are guaranteed to own the winners.
Bogle put it in one of his most famous lines: "Don't look for the needle in the haystack. Just buy the haystack!"
Why does this matter so much? Because the stock market's gains are far more concentrated than most people imagine. Professor Hendrik Bessembinder of Arizona State University studied every U.S. common stock listed from 1926 to 2025, almost 30,000 of them. His 2026 update found something shocking.
Just 1,082 companies, about 3.7% of the total, created all of the stock market's net wealth above what you could have earned in Treasury bills. A mere 46 companies produced half of the $91 trillion in net wealth created over the century. Meanwhile, 59% of stocks did worse than Treasury bills over their lifetimes, and the median stock lost money.
Read that again. If you pick stocks, the odds are that most of your picks will lag cash. Your entire result depends on whether you happen to own the handful of giants that make the market's average. Miss them and you lose, even in a strong market.
An index fund solves this problem for almost nothing. It owns the giants automatically. It owns the next giant before anyone knows it is one. And it costs a few cents per $100 a year.
Your Move Make a broad, low-cost index fund the core of your portfolio, one that tracks the S&P 500, the total U.S. market or the whole world. If you still enjoy picking stocks, limit it to a small slice you can afford to lose, and keep score honestly. |
If you live outside America and wonder how to own the haystack from where you are, read How to Invest in the S&P 500 If You Live Outside the United States.
Rule 6: Minimize the Croupier's Take
In plain English: in a casino, the house always takes its cut. In investing, fees, sales charges and trading costs are the house's cut, and every dollar of it comes straight out of your return.
Bogle called this the cost matters hypothesis, and it is simple arithmetic. Investors as a group earn the market's return before costs. After costs, they must earn less, by exactly the amount of the costs. He liked to say that in investing, you get what you don't pay for.
The SPIVA results above are mostly a story about costs. Professional managers are not dim. They are competing against each other, and after they charge their fees, the majority must fall behind the index. Over 20 years, about 93% did.
The most famous demonstration came from Warren Buffett himself. In 2007 he bet $1 million that a plain S&P 500 index fund would beat a selection of hedge funds over ten years, after all fees. Ted Seides of Protégé Partners picked five funds-of-hedge-funds and took the bet. From 2008 through 2017, Buffett's Vanguard index fund compounded at 7.1% a year. The hedge fund picks averaged 2.2%. The charity Girls Inc. of Omaha collected about $2.27 million. Buffett's explanation was blunt: the managers were not stupid, they were simply too expensive. The full story is in Buffett's Million-Dollar Bet: How One Boring Index Fund Beat Wall Street's Best Hedge Funds.
Now bring it closer to home. Many readers of this site are in Asia, and in Malaysia the croupier's take can be steep. A typical equity unit trust prospectus allows a sales charge of up to 5.5% of what you invest, plus an annual management fee of up to 1.5% and a trustee fee on top. A research analyst at iFAST Capital has described Malaysian upfront sales charges as among the highest in the region. Compare that with the average index equity mutual fund in the United States, which charged investors just 0.05% a year in 2025, according to the Investment Company Institute.
What does that difference do over a working lifetime? Here is 100,000 in any currency, invested for 30 years at the same 8% yearly market return.
The low-cost index fund grows to roughly 992,000. The high-cost fund, after a 5.5% sales charge and 1.57% a year, grows to about 613,000. Same market. Same 30 years. Nearly 380,000 went to the house.
Your Move Find your all-in cost today: the fund's expense ratio, any sales charge, any platform or wrap fee and any adviser fee. Add them up. If you are paying more than about 1% a year in total, ask hard questions. In Malaysia, compare what you pay through an agent with lower-cost routes such as online platforms, and ask whether a broad, low-fee index ETF could do the same job. |
Rule 7: There's No Escaping Risk
In plain English: you cannot avoid risk. You can only choose which risk to take.
Many investors who have been burned decide the answer is to hide in cash forever. Bogle understood the impulse, and he also understood its cost. Stocks carry the risk of sharp falls. Cash carries the risk of never growing enough to fund your retirement.
Professor Aswath Damodaran of NYU Stern keeps one of the most widely used records of U.S. market history. It shows what $100 invested at the start of 1928 became by the end of 2025.
In stocks, it grew to about $1.16 million. In 10-year Treasury bonds, about $7,750. In three-month Treasury bills, the classic "safe" cash investment, about $2,580. These figures are before inflation, which eats away much of the cash result.
But look closely at the stock line. It fell in 26 of those 98 years. It lost almost 44% in 1931 and almost 37% in 2008. That is the price of admission. You cannot get the reward without sitting through the falls.
Bogle's answer was not to avoid stocks. It was to balance them. Bonds and cash are there so you can sleep, pay your bills and avoid selling stocks at the bottom. Stocks are there so your money outgrows inflation over decades.
The Two Risks Most People Confuse Short-term risk is seeing your portfolio drop 30% in a year. Long-term risk is reaching 75 and running out of money. Cash protects you from the first and exposes you fully to the second. A sensible mix of stocks and bonds is the trade-off between them. |
If a big loss has made you afraid of the market, How Long Does It Take to Recover From a 50% Stock Market Loss? The Math Nobody Shows You walks through the numbers calmly.
Rule 8: Beware of Fighting the Last War
In plain English: generals are famous for preparing to fight the previous war. Investors do the same thing with their money. They load up on whatever worked last decade, just as it stops working.
The most dramatic example of the past 40 years is Japan. In 1989, Japan's stock market was the envy of the world. Japanese companies made up about 37% of the value of all stocks on Earth, and the Nikkei 225 traded at about 60 times earnings. On December 29, 1989, the Nikkei closed at 38,915.87. Investors who bought that "sure thing" waited 34 years to get back to even. The index did not close above that level again until February 22, 2024. Along the way, in October 2008, it hit a low 82% below its peak.
A more recent example happened in plain sight. The ARK Innovation ETF, run by Cathie Wood, gained almost 153% in 2020. Money poured in after the big year. Morningstar estimates ARK's funds took in about $29.2 billion in 2020 and 2021. Then the flagship fund lost 26% in 2021 and 67% in 2022.
In a February 2024 study, Morningstar estimated that ARK's family of funds had wiped out about $14.3 billion of shareholder value over the ten years to 2023, the most of any fund company. The fund's managers did not change. The investors' timing did. Most of the money arrived after the gains, so most investors experienced the losses.
I name ARK only because the numbers are public and well documented. The lesson applies to every hot theme you will ever be sold: internet stocks in 1999, Japanese stocks in 1989, the "Nifty Fifty" in 1972, and whatever the next one will be.
Your Move When you feel the urge to buy a hot sector, theme or country, ask one question: "Would I have bought this five years ago, before it went up?" If the honest answer is no, you are fighting the last war. |
For more on how trading for quick wins usually ends, read Why Most Day Traders Lose Money, and the Boring Alternative That Quietly Wins.
Rule 9: The Hedgehog Bests the Fox
In plain English: one simple strategy, followed for decades, beats a hundred clever ones.
The Greek poet Archilochus wrote that the fox knows many things, but the hedgehog knows one big thing. The philosopher Isaiah Berlin made the line famous in a 1953 essay. Bogle borrowed it for investing. The financial industry is the fox, with endless products, strategies and tricks. The index fund is the hedgehog. When danger comes, it simply curls into a ball and waits.
No one lived this rule better than Taylor Larimore. As a young paratrooper in the 101st Airborne Division, he fought at Bastogne during the Battle of the Bulge in 1944, earning five combat decorations. After the war he worked in finance and insurance. In 1986 he read Bogle's work and became convinced by the simple logic of broad-market index funds.
Larimore went on to help start an online community of ordinary investors that began in 1998 on a Morningstar message board. In 2000, he and fellow investor Mel Lindauer hosted the group's first gathering at his condo in Miami, and Bogle himself came as the keynote speaker. The members became known as the Bogleheads, and Bogle called Larimore the "King of the Bogleheads."
Larimore's own approach became famous as the three-fund portfolio: a total U.S. stock index fund, a total international stock index fund and a total bond index fund. That is all. No forecasts, no hot tips, no star managers. He passed his 100th birthday still championing it. The hedgehog does not need to be brilliant. It only needs to be patient.
Your Move Try to explain your whole investment plan in two sentences. If you cannot, your plan is probably too complicated, and complexity is where fees, mistakes and temptation hide. |
For the one-sentence version Warren Buffett recommends, read Warren Buffett's Advice for 99% of Investors Fits in One Sentence. Almost Nobody Follows It.
Rule 10: Stay the Course
In plain English: this is the rule that makes the other nine work. Pick a sound plan, then keep going through every storm.
"Stay the course" was Bogle's signature phrase. He signed it in books, closed his speeches with it, and used it as the title of his final book in 2018. It fits the ship he named his company after. A ship that changes direction with every wave never reaches port.
Here is why it matters so much. The stock market's best days tend to arrive right next to its worst days, when fear is at its peak. J.P. Morgan Asset Management studied $10,000 invested in the S&P 500 from January 2006 to December 2025.
Stay invested for the whole 20 years, and $10,000 grew to $80,619. Miss just the 10 best days, and you ended with $35,866, less than half. Miss the 60 best days, and your $10,000 shrank to $4,966. The person who sells in a panic is almost always on the sidelines when the rebound comes.
We saw this again in 2025. In early April, U.S. stocks came close to bear market territory amid tariff fears. Then they staged a rapid recovery, set 39 record closing highs and finished the year up about 18%. Those who held on were rewarded. Those who sold in April faced the painful question every panic seller eventually faces: when do I get back in?
Your Move Decide now what you will do in the next crash, and write it down: keep your monthly investment going, rebalance back to your plan once a year, and do not check your portfolio more than once a month. Bogle's own advice was to stop peeking at your account so often. |
If you are deciding how to put money back to work after a big loss, read Lump Sum or Monthly? How to Put Money Back Into the Market After a Big Loss.
The 10 Rules at a Glance
Save this table. It is the whole article on one screen.
Bogle's rule | The mistake it stops | The proof |
|---|---|---|
1. Reversion to the mean | Buying last year's winner | Only 4.5% of top-half funds stayed there 2021 to 2025 |
2. Time over impulse | Selling or switching in a panic | A 1.2-point yearly gap costs about $54,000 per $10,000 over 40 years |
3. Buy right, hold tight | Owning more stocks than you can stomach | Holders grew 50%, sellers who stayed out grew 2% (2008 to 2011) |
4. Realistic expectations | Chasing promises of huge returns | 8.6% of return came from business, 0.4% from mood (1871 to 2014) |
5. Buy the haystack | Betting on a few stocks | About 4% of stocks created all net wealth since 1926 |
6. Minimize the croupier's take | Paying high fees and sales charges | 93% of active U.S. large-cap funds lagged over 20 years |
7. No escaping risk | Hiding in cash forever | $100 in 1928 grew to $1.16 million in stocks, $2,578 in T-bills |
8. Don't fight the last war | Piling into the hot theme | The Nikkei took 34 years to regain its 1989 peak |
9. Hedgehog over fox | Complicated, clever strategies | Buffett's index fund beat hedge funds 7.1% to 2.2% a year |
10. Stay the course | Missing the market's best days | Missing 10 best days cut $80,619 to $35,866 (2006 to 2025) |
Your 10-Minute Bogle Check-Up
Take ten minutes with the checklist below. Answer each question honestly. Every "no" is a place where money is probably leaking out of your portfolio, and every leak you plug compounds in your favor for the rest of your life.
What Bogle Would Say If You Have Already Lost Money
If you have lost a lot of money, maybe in stock tips, a hot fund, options or a trading app, this part is for you.
First, you are in very good company. Bogle himself made a business decision in his thirties that ended up costing him his job. He did not let it define him. He used it to build something better.
Second, the rules above do not require you to win back your losses quickly. In fact, trying to win them back quickly is how small losses become big ones. What they ask is calmer and far more reliable:
Stop the bleeding. Stop trading, stop chasing, stop taking new risks to "make it back."
Count your costs. Find out exactly what you pay in fees and sales charges, and cut them.
Pick a simple mix. A broad index fund for growth and bonds or cash for stability, in proportions you can hold through a crash.
Automate. Invest a fixed amount every month so emotion never gets a vote.
Stay the course. Give compounding the one thing it needs, which is time.
You cannot change what you lost. You can change what happens to every dollar from here. For a step-by-step restart, read Index Funds for People Who've Been Burned: A Plain-English Guide to Starting Over. If you are past 50 and worried it is too late, read You Lost Money in the Stock Market at 50. Is It Too Late to Retire Comfortably?
Frequently Asked Questions
What are Jack Bogle's 10 rules for investors?
In Chapter 9 of The Clash of the Cultures (2012), Bogle listed ten rules: remember reversion to the mean; time is your friend, impulse is your enemy; buy right and hold tight; have realistic expectations; forget the needle, buy the haystack; minimize the croupier's take; there's no escaping risk; beware of fighting the last war; the hedgehog bests the fox; and stay the course.
What did Jack Bogle mean by "buy the haystack"?
He meant that instead of searching for the few stocks that will become big winners, you should own the entire market through a low-cost index fund. Research by Hendrik Bessembinder shows that about 4% of U.S. stocks created all of the market's net wealth from 1926 to 2025, so owning everything is the surest way to own the winners.
What is the croupier's take in investing?
It is Bogle's name for all the costs that come out of your return: fund expense ratios, sales charges, adviser fees, platform fees, trading costs and taxes. Like a casino's cut, these costs are certain, while returns are not. Lower costs leave more of the market's return in your pocket.
What is the bagel and the doughnut?
It is Bogle's way of splitting stock returns into two parts. The bagel is investment return, which is dividend yield plus earnings growth. The doughnut is speculative return, which comes from changes in the price investors pay for earnings. Over the long run, nearly all of the return has come from the bagel.
Did Jack Bogle think you should own bonds?
Yes. He believed most investors should hold a balance of stocks and bonds that they can stick with through bad markets. His often-quoted rule of thumb was to hold roughly your age in bonds, adjusted for your own circumstances.
Do Bogle's rules work for investors outside the United States?
The principles are universal: keep costs low, diversify broadly, keep expectations realistic and stay invested. The details differ by country, including taxes, available funds and fees. Investors in places such as Malaysia should pay extra attention to sales charges and look at lower-cost ways to own broad index funds.
Is it too late to follow Bogle's rules if I have already lost money?
No. The rules are about what you do from here. Cutting costs, simplifying, automating and staying invested can improve your results from the next dollar you invest, whatever happened in the past.
When did Jack Bogle die?
John C. Bogle died on January 16, 2019, at the age of 89, in Bryn Mawr, Pennsylvania. He founded Vanguard in 1974 and launched the first index mutual fund for ordinary investors in 1976.
Before You Invest Another Dollar
Bogle's genius was not a secret formula. It was honesty. He looked at an industry built on complexity and fees and said, in effect, "The emperor has no clothes."
But knowing the rules is only half the battle. The other half is understanding exactly why you lost money in the first place, so you never repeat it.
FREE REPORT: Why You Lost Money in the Stock Market (And Why It Wasn't Your Fault) If you have lost money before, you are not foolish. You were up against a system designed to separate ordinary investors from their savings. My free report reveals the 7 Wall Street traps that quietly drain ordinary investors, and the one boring strategy the industry hopes you never discover. Read it before you invest another dollar. |
This article is for education only and is not personal financial advice. Investing involves risk, including the loss of money you invest. Past returns do not guarantee future results. Consider speaking with a licensed financial adviser about your own situation.
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Focus Malaysia, Alternative investments to high-cost unit trusts
Associated Press via Business Standard, Japan's Nikkei breaks its 1989 record
Man Group, Japan Stock Market Record: Why it's Not Bubble 2.0
Morningstar, 15 Funds That Have Destroyed the Most Wealth Over the Past Decade
Reuters via Investing.com, Ark Investments tops Morningstar list of wealth-destroying ETF issuers
The White Coat Investor, Taylor Larimore 100th birthday interview
AARP, Investing Lessons From Taylor Larimore's 98 Years of Wisdom
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