“Diversification is always working; sometimes you’ll like the results and sometimes you won’t.” – Larry Swedroe Traders get to use cool sayings like, “let your winners run but cut your losers quickly.” Long-term investors need to periodically do the exact opposite and sell their winners to buy their losers. Mean reversion rests on the premise of…

“It is high time for costs to be recognized as a crucial factor in determining the future returns that funds earn.” – John Bogle These are the Vanguard fund performance results against their peer group by category through December 31, 2013 over various time frames: You can see that Vanguard funds outperform the majority of…

“Don’t do something; just stand there.” – Jack Bogle

“Understand that just as it is complicated to make things simple, it is simple to make things complicated as well.” – Anonymous

“Think like an investor and not like an economist or politician.” – Richard Bernstein According to the National Bureau of Economic Research (NBER), since 1857, the U.S. has experienced 33 recessions that lasted an average of 17 months. That means that there’s been a recession in one out of every five years, on average. In…

“Hire an advisor because it is very hard to see the errors in your own behavior & it is easy to see the errors in someone else’s behavior.  Very few people need to hire advisors because of the size of their calculators.  They need an advisor to help them behave correctly.” – Carl Richards

“The good news is that in reality, risk and diversification are about what happens over the long haul, not during a punishing downturn like 2007-2009.” – William Bernstein In Skating Where the Puck Was, William Bernstein tackles one of the central tenets of any comprehensive investment plan — diversification. Specifically, Bernstein discusses correlation among the…

“The world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version.” – J.K. Galbraith Earlier this week I set out to define ‘This time is different.’ It’s a tough one to explain considering markets are always different because they’re complex, adaptive systems. But it’s never…

“The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological.” – Howard Marks In John Templeton’s timeless 16 rules for Investment Success (published in 1933) he states: “The investor who says, ‘This time is different,’ when in fact it’s virtually a repeat of an earlier situation, has…

“The Prussian General Clausewitz has said, ‘The greatest enemy of a good plan is the dream of a perfect plan.’ And I believe that an index strategy is a good strategy.” – John Bogle