After a week of big equity market swings and the Canadian banks paying up to 9.5% to raise capital in the income markets, I have attached below an article by John Bogle, founder of Vanguard, to underline lessons of the past. They include:
Also, I quote from a recent article by Larry Swedroe who spoke to PWL clients last summer.
“Investment returns are not earned smoothly – returns are not even close to being normally distributed (like a bell curve). The result is that most of the market’s returns come from short, but powerful, bursts of bull and bear markets. That is why Warren Buffet concluded: “Inactivity strikes us as intelligent behavior.”
The second attachment, S&P 500 – 184 Years of % Returns, supports Larry Swedroe’s statement that most market returns come in short powerful bursts. And, finally, the 2008 corrections have created some very cheap assets.
In closing, I also invite you to peruse our Market Statistics as well as other information that may be of interest to you. Thank you and best regards,
John Bogle: Six Lessons for Investors
S&P 500 – 184 Years of % Returns