Character and Guts: Wisdom from Investing Legend Jack Bogle

If you're a do-it-yourself investor today, you largely have investing legend John "Jack" Bogle to thank.

Bogle is recognized for helping bring investing to the masses, revolutionizing how average folks could grow their wealth. It was Vanguard Group, the investment firm he founded in 1975, that was the first to introduce index mutual funds for individual investors. That was in 1976.

Bogle died on Jan. 16 at the age of 89, but his legacy of sensible investing lives on. Time magazine named him one of the 100 most influential people in the world in 2004, and Warren Buffett has said, "Jack Bogle has probably done more for the American investor than any man in the country."

As the author of more than 10 books, Bogle shared his investing knowledge throughout his decades-long career. Here are some of his words of wisdom over the years that any DIY investor will relate to.

Emotional Strength

"Your success in investing will depend in part on your character and guts and in part on your ability to realize, at the height of ebullience and the depth of despair alike, that this too, shall pass."

Stock markets are like the weather — always changing. Yet, investors aren't obliged to be so volatile. In fact, keeping emotions in the check is one of the pillars of successful investing.

Diversification

"Don't look for the needle in the haystack. Just buy the haystack."

There are many ways to diversify a portfolio. Bogle revolutionized the idea that an investment could track large indices and give even small investors exposure to a variety of companies and industry sectors — thus providing an automatic form of diversification that would be difficult to create otherwise.

Why Low Costs Win

"You want to be average and then win by virtue of your costs. Cost is a handicap on the horse. If the jockey carries a lot of extra pounds, it's very tough for the horse to win the race."

We can't control our rate of return, but we can control the investment fees we pay. The lower the fees, the lower the hurdle for a positive return.

Time In, Not Timing

"The idea that a bell rings to signal when to get into or out of the stock market is simply not credible. After nearly fifty years in this business, I don't know anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has."

As much as we'd love a crystal ball, it's reassuring to know that even the investing greats don't have all the answers on the best times to buy and sell!

Keeping it Simple

"Investing is not nearly as difficult as it looks. Successful investing involves doing a few things right and avoiding serious mistakes."

Sounds simple coming from an investing great, but how do we know what mistakes to avoid? Well, we can start with some of the investor behaviours often associated with diminished returns: market timing, overpaying and succumbing to emotions of greed or fear. As with everything, practice makes perfect!

Staying the Course

"Presumably you are accumulating money now and putting money away for the future. Do not, under any circumstances, stop doing that. That is the first rule. Don't stop investing."

No question, market volatility can be tough to take. One key to staying on track is to have an investing plan that lets you focus on where you're going and how you'll get there.