Want the principles of good investing explained simply?
Well, it doesn't get simpler than a single sentence. Here's my latest attempt, with a distinct nod to the late John Bogle:
“Performance comes and goes, but costs are forever.”
Of course, I'll have to explain this just a bit further.
When Stocks Didn’t Perform
Remember that time bonds beat stocks over a 50-year period?
Of course not. Nobody who remembers that time is alive today.
But remember it or not, it happened. And as George Santayana famously observed, “Those who cannot remember the past are condemned to repeat it.”
Way back then, the long-term performance of stocks was absolutely dreadful. Over this 50-year stretch, stocks compounded at less than 1% per year!
Clearly, I must be cherry-picking! I must have selected an especially bad period that ends during the Great Depression, right?
Wrong.
