Vanguard has long professed the value of a long-term orientation and discipline in its Principles for Investing Success. Or as Vanguard’s late founder Jack Bogle would emphasize: “stay the course” in any market environment.
For the average investor, maintaining a long-term perspective, tuning out the noise, and resisting the temptation to make rash moves may be difficult. To offer reassurance and help investors weather this period of market turmoil, Vanguard CEO Tim Buckley shares timely guidance in the above video.
“At Vanguard, we’re known for counseling investors to ‘stay the course’ in good times and bad, which means keeping a long-term perspective and focusing on the parts of investing you can control, such as diversification, balance, and cost,” said Buckley.
Encouragingly, despite the volatility, Vanguard investors’ trading behavior has been measured. Some observations from last week:
- While there was an increase in trading amongst Vanguard’s clients, overall trading was modest on an absolute basis. Approximately one percent of U.S. Vanguard households traded each day last week; a typical day is 0.4 percent.
- The majority of households trading (about 70 percent) moved money into equities rather than into fixed income (bonds and cash).
- Overall, Vanguard experienced net inflows into equity funds ($14.7 billion) and money market funds ($7.5 billion) and net redemptions from bond funds (-$15.2 billion).