January 7, 2014
Investment Focus: Follow 5 Simple Rules
Vanguard Group Inc. founder John Bogle’s views about investing, not surprisingly, promote the indexed mutual funds that Vanguard offers. But his views have solid support in the academic literature.
Here’s our translation of his five simple rules for investment success – sound advice for readers who want to work on their 401(k) portfolios:
- Remember reversion to the mean. If a company’s stock or the overall market has had unusually strong performance, it’s unlikely to continue at that pace.
- Forget the needle and buy the haystack. Invest in broadly diversified funds, such as index funds that track the market – not in individual company stocks or the money managers who try to find the best ones. …Learn More