Markets are unpredictable and investment trouble comes and goes. Already in 2021, we’ve seen speculative behavior around AMC and Gamestop and over-heated trading based on emotion rather than originality. At Vanguard, we believe you can stay on the path to long-term financial success by avoiding trends and focusing on balance, discipline and diversity.
In his new book, More straightforward about investing: Lessons for life, Former Vanguard CEO Jack Brennan delivers timely antidote in today’s headline. He showed – in a simple, straightforward way – how to build a sound investment program in the long run, evaluate funds and ETFs (exchange-traded funds) and manage risk and tax.
He also outlines 12 timeless policies that have helped countless investors like you navigate the financial markets. Below are 5 of those sustainable lessons learned through conversations with vanguard crews and partnerships with clients around the world.
5 principles to guide your financial journey
You cannot control the performance of the market, economy or personal security. However, you can give yourself the best chance for investment success by taking ownership of your money.
Create a financial game plan
First, establish clear, achievable goals and create a plan that will help you reach them. Be conservative in your assumptions about how fast your money will grow. You can help keep track of your plans by avoiding illegal savings or spending requirements.
Become a disciplined saver
The key to building a secure financial future is “live your way.” Practice keeping money away. If saving money doesn’t come naturally to you, find creative ways to make it a fun challenge. Consider what you want to change to make it a little more different for your future.
Invest with balance and diversity
Create a good investment strategy by selecting an asset allocation that uses a wide variety of funds and considers your goals, time horizons, and risk tolerance.
Control your spending
Although you can’t control the market, you can To be able to Control your investment costs and taxes.
The less you pay for the fund, the more your share in the return on investment. Be sure to avoid funding with a high expense ratio. The average Vanguard Mutual Fund-ETF spending ratio is 83% lower than the industry average. *
For tax cuts, consider it as a tax-efficient investment Indicator Mutual funds and ETFs. Another way to reduce the impact of IRA tax. **
Maintain a long-term outlook
Over time, you will experience both good and challenging times that can evoke different emotions. Resist the urge to make emotional decisions. Adopting a disciplined approach that keeps you focused on your long-term goals is a winning strategy for all asons.
If you want to see up close More straightforward about investing, You can buy the book from wiley.com using code MST2E for 30% discount.
Copies are available at regular prices through Amazon and other retailers.
All proceeds from the book will be donated to the Vanguard Strong Start for Kids™ program, the firm’s signature charitable initiative that invests tomorrow in supporting the development, learning and enjoyment of young children today.
Vanguard is not affiliated with wiley.com or Amazon.
* Vanguard average ETF to mutual fund spending ratio: 0.09%. Industry average ETF to mutual fund spending ratio: 0.54% of all average asset-based. Exclude the industry average vanguard. Sources: Vanguard and Morningstar, Inc., as of December 31, 2020.
** When withdrawing money from the IRA 597 years ago, you may have to pay general income tax and 10% federal penalty tax.
For more information about vanguard funds or vanguard ETFs, visit vanguard.com to get a prospectus or, if available, a summary prospectus. The prospectus contains investment objectives, risks, charges, expenses and other important information about a fund; Read and consider carefully before investing.
You must buy and sell Vanguard ETF shares through Vanguard Brokerage Services (we offer them commission-free) or through other brokers (which may charge a commission). See Vanguard Brokerage Service Commission and Fee Schedule for complete information. Vanguard ETF shares are not redeemable in any way other than the merger of millions of dollars worth directly with the issuing fund. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be lower or lower than the net asset value.
All investments are at risk, including the potential loss of money you invest. Diversity does not guarantee gain or protect from loss.
Jack Brennan joined Vanguard in 1982 and served as CEO from 1996 to 2008 and chairman of the board from 1998 to 2009. Currently, he serves as Chairman Emeritus and Senior Advisor. He has been in the investment management business for almost 40 years.
John Woerth is a senior communications consultant who recently conducted Vanguard’s public relations and strategic communications work. Since joining the company in 1986, he has held several communications positions. John Brennan helped update the new book and he also helped Vanguard founder John C. Bugle on investing.
“5 investment policies that last”,