Three stock market tips from legendary investor Jack Bogle to create long-term wealth

By: | Updated: October 24, 2018 3:56 PM

Jack Bogle, often referred to as the ‘King’ of index funds has time and again advocated the benefits of low-cost investing through passive mutual funds.

“In the long run, corporate earnings and dividend yield drive stock prices,” Jack Bogle said at the conference.

Jack Bogle, often referred to as the ‘King’ of index funds has time and again advocated the benefits of low-cost investing through passive mutual funds. In a recent interview to ET Now, Jack Bogle, founder of the iconic Vanguard Group reiterated the importance of investing through these index-mutual funds, and advised investors to not try and beat the markets. “If you are earning an average of 7% market returns and 2% goes away in the name of fund management fees, it would be a lot of cost to pay,” Jack Bogle said on the sidelines of Morningstar Inc conference. We take a look at three tips from Jack Bogle to create long-term returns in the stock market.

Dividends are investors best friends

Jack Bogle said that dividends are investors best friend. “In the long run, corporate earnings and dividend yield drive stock prices,” Bogle said at the conference. The compounding power of dividend is amazing, he added.

Index fund cost lower than active funds

Bogle said that investors could look to invest via indexed funds rather than investing through active funds. Notably, Jack Bogle had pioneered the concept of index fund investing on the premise that, in the long-term, it’s near impossible to beat the market, after considering costs associated with actively managed funds.

Don’t try to time the market

According to Jack Bogle, optimum returns come from staying the course, and trying to time trades is a flawed decision, and investors should avoid trying to beat the market. “Stay the course, don’t let these changes in the market, even the big one [like the financial crisis] … change your mind and never, never, never be in or out of the market. Always be in at a certain level,” Jack Bogle explained in a recent interview to CNBC.

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