John Berger: Simple Principles for Long-Term Investing

John Berger: Simple Principles for Long-Term Investing

Buffett, 87, who has been managing investments independently since May 1956, has never publicly recommended on any occasion that the Any stock. from 1993 to 2008, Buffett went so far as to publicly recommend index funds eight times. On two of those occasions Buffett explicitly recommended index funds under the Pioneer Group of Companies, which Borg founded. Buffett is most highly regarded by all investors for stock investing, and by John Bogle for fund investing.

In the case of mutual funds, John Berger espouses long-term investing based on simple principles, which is not difficult to achieve. Investors should not only focus on the short term movement of the market, and do not have to look for the next hot fund, they should spend their mind on picking the fund. . The key to fund selection is not to focus solely on future returns, which are beyond the investor's control, but to focus on risk, cost and Time these factors that investors can control.

Over the long term, beating the market is a myth, and it is difficult for any fund to escape the iron law of mean-reversion. Therefore, to achieve the maximum possible market rate of return, it is necessary to reduce costs (i.e., the cost of investment advice, the portfolio of (Management and administrative costs, fees for transactions, and all costs such as taxes). Also, take full advantage of compound interest and hold it for the long term. With an annualized return of 10%, for example, an investment of $10,000 would grow to $26,000 in ten years, which is 2.6 times the original capital. John Borg mentions that it's wise to hold low-cost index funds for the long term.

Simple principles are the foundation of a long-term investment strategy that will reward investors for their trust in their investments, and many mutual funds Investors stray away from the idea of long-term investing and they end up reaping only dashed expectations. They chase unrealistic performance and adopt costly short-term strategies that ultimately distract from the most important aspects of investment success. The secret: simplify. The secret to investing is to have no secret reading at all and let the market run its course.

John Berger also gave investors a few simple rules for successful long-term investing.

You have to invest.

The biggest risk is not short-term stock price fluctuations, much less projects that pose long-term risks, but rather not investing your money in projects that pay off handsomely.

Time is your friend.

Give yourself as much time as you need. Start investing in your twenties, even if you have very little money then, but never stop, and compound interest is a miracle. Making the most normal of investments at difficult times will help you keep moving forward.

Impulse is your enemy.

Eliminate the emotional element from your investment plan, maintain a rational expectation of future returns, and avoid changing expectations due to market volatility.

Mastering basic arithmetic

Keep your investment costs manageable. Your net return is equal to the total return of your portfolio, minus the costs you incur, including sales commissions, advisory fees, and Transaction costs, etc. Reducing costs will make it easier to accomplish your goals.

Stick to simplicity.

Don't complicate the process, the basic point of investing is to silo and appropriately allocate your stocks, bonds and cash reserves. Choose funds that focus on a middle-of-the-road approach to investing in high-grade securities; take care to balance risk, return and cost.

persevere to the end (idiom); to stay the course

No matter what happens, stick to your investment plan. I've said "stay the course" a thousand times, and I mean it every time. This is the single most important piece of investment advice I can give you.

Let us face the future with confidence that there may be a winter longer and colder than before, or a summer drier than before. And more fiery. In the long term, however, our economy and financial markets will remain stable and rational. Don't let short-term volatility, market psychology, false hopes, fear and greed get in the way of sound investment judgment. If you like gardens, you won't mind working and waiting there, and in the right season you'll be sure to see it in full bloom.