#SFTW Bogle’s 7-step plan for every investor
Posted by Robin Powell on May 26, 2017
SOMETHING FOR THE WEEKEND
Jack Bogle has just written an essay in the Financial Analysts’ Journal in which he effectively condenses what he’s learned from 65 years in the investing industry.
It’s mainly aimed at financial professionals, but it also includes a seven-point plan for investors. For regular TEBI readers, this is all familiar, basic stuff. But I find it extraordinary how many folks — including people like pension fund trustees and financial advisers who really should know better — simply do not get it. If you know anyone who’d benefit from Bogle’s wisdom, please share these tips with them. Investing is nowhere near as complicated as so many financial professionals like to make out it is!
David Booth: It ultimately comes down to discipline
I’ve twice had the pleasure of interviewing David Booth, the Chicago Business School benefactor and co-founder of Dimensional Fund Advisors.
You might think he’d be most keen to talk about the Efficient Market Hypothesis, the small-cap premium or, perhaps, the extraordinary progress Dimensional has made in recent years. But no, what he really welcomed was the opportunity to remind people that successful investing entails not just following the evidence, but having the discipline to stay the course when you might be tempted to abandon it.
In Part 9 of how to Win the Loser’s Game, my 2014 documentary for Sensible Investing TV, he said this:
“In 2008-2009, it was difficult to get people to stay the course. My heart goes out to these people that were invested in equities, lost half their money then got out and missed the rebound. It may take quite a while for them to get back even again.”
Now, in a letter to Dimensional investors, David Booth has revisited the same theme.
Please, not self-regulation again!
Once more with feeling: Self-regulation of the asset management industry does not work.
For decades, successive UK regulators have trusted fund managers to get their house in order. Time and time again, the faith they’ve shown in them to do the right thing has proved to have been misplaced.
Now, the Investment Association, the principal UK trade body, has come up with a Draft Cost Disclosure Code. But — surprise, surprise — it’s hopelessly conflicted.
Alan Miller’s 6 key takeaways from the FCA report
Six months have now passed since the Financial Conduct Authority issued its interim report on competition in UK asset management.
So much has happened since then — the closure of big hedge funds, the extraordinary success of Vanguard and ever more dire statistics on active fund performance — that it’s easy to forget what an extraordinary report it was.
I’ve been talking to fund manager Alan Miller, who, like me, has campaigned for several years for greater transparency in the investing industry.
In this six-minute interview, Alan evaluates the importance of the FCA report — picks out what he considers to be its most important findings.
Learn how to invest in 15 minutes
It’s nearly a year since Index Fund Advisers in California launched Index Funds: The 12-Step Recovery Program for Active Investors — a 72-minute online documentary about evidence-based investing.
It was produced and presented by me and featured Mark Hebner, IFA’s founder, on whose book of the same name the film is based.
I’m pleased to say there is now an abridged version, coming in at around 16 minutes, which is free to view. I hope you enjoy it — and please share it if you do.
From our sister blog, Adviser 2.0
Also worth reading
Why future investment returns may well be lower than they have been (Of Dollars and Data)
Why ordinary investors actually aren’t as dumb as you might think (Jonathan Clements)
Of all the factors in the factor zoo, which ones pass the test? (Larry Swedroe)
The benefits of simplicity in personal finance (Wall Street Physician)
A few big stocks don’t tell the whole market story (Ben Carlson)
Yes, the fiduciary rule is finally coming (Nir Kaissar)
Finally, some thoughts on events in Manchester
It’s hard to think of anything to say that hasn’t been said already about the horrific events in Manchester on Monday night. The deliberate targeting of innocent children enjoying the night of their lives is unspeakably evil.
Terrorists want us to live in fear and, let’s face it, to an extent they succeed. Monday’s suicide bomber lived only a mile from my own teenage daughter, a student at Manchester University. She and her boyfriend have tickets for a gig in the city on Saturday night. I wouldn’t blame them if they decided not to go.
But, in this darkest hour, I genuinely believe that Manchester will come back stronger. It will find a resilience, an inner strength — just like my own city, Birmingham, did after the IRA pub bombings that so frightened me as a child. I’ve found the same determination in other cities I visit, like London, New York and Boston.
Monday is a Bank Holiday in the UK. The TEBI and Regis Media team will be back on Tuesday. Whatever you’re doing, having a safe and restful weekend.