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Video: Vanguard’s Jack Bogle on how to invest (and earn) in ‘interesting’ times

25 years later, Jack Bogle's investment advice still makes a lot of sense

With the looming threat of a full-on recession, some are already facing the consequences of an economic downturn. Many more are wondering how they can protect themselves financially for an uncertain future. Oftentimes, the best way to plan for tomorrow is by turning to past wisdom. Check out Vanguard founder and financial guru Jack Bogle’s investment advice for “interesting times” like these.

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Jack Bogle and smart investing

For the uninformed, the late Jack Bogle was an American business magnate, investor, and philanthropist. His most notable achievements include founding and serving as the chief executive of The Vanguard Group and creating the first index fund. Throughout his life, he was a smart investor and advisor, recommending long-term thinking and investing or short-term gains and speculative choices.

Bogle’s expertise is on full display in this clip of his 1997 speech at a World Affairs Council of Philadelphia event. The speech, which originally aired on C-SPAN2, begins with him discussing the state of the US and foreign markets. At the nine-minute 28-second mark, he gets into his five essential principles for maintaining an investment portfolio during uncertain times—and his advice is as relevant today as it was 25 years ago.

5 principles for investing during 'interesting times' - Jack Bogle (1997)

5 simple investment principles to live by

So how should you maintain your investment portfolio in these turbulent times and into the future? Let’s take a closer look at Bogle’s five most important things to remember when you’re investing in “interesting times.”

  1. Bogle’s first piece of advice is also the simplest: “Invest you must.” Even though it may not seem like a good time to invest, it’s an even bigger risk to not invest at all. He preaches thinking focusing on the long-term benefits of making your money work for you, not the short-term risk of price volatility. In his own words, “never think you know more than the market does. You’re apt to be wrong if you do.”
  2. His next recommendation is to give yourself as much time as you can. Start investing as early as possible to set yourself up for the future. “Compound interest is a miracle, and time is your friend.”
  3. His third principle focuses on viewing the stock market with a healthy dose of realism. “Have rational expectations about future returns to be mentally prepared for market declines.” Neither good times nor bad times will last forever, so try to keep your emotions out of your decision-making process. “Impulse is your foe,” he said.
  4. For his fourth principle, Bogle advised relying on simplicity above everything else. He said, “Basic investing is simple: a sensible asset allocation to stocks, bonds, and reserves, a middle-of-the-road selection of diversified funds, a careful balancing of risks and returns. Cost can kill long-term returns — don’t disregard low-cost index funds.”
  5. And for his last piece of advice: “Stay the course.” No matter what’s happening in the market or in the world around you, don’t give up on your investments. Patience is essential if you want your investments to grow and your finances to thrive.

Recessions are always stressful, and planning for an unclear future can be a challenge. But with the advice of experts like Jack Bogle, you can gain a little bit of peace of mind. And hopefully, when the next recession hits, you’ll have the wisdom and investment portfolio needed to come out the other side stronger than before.

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