Vanguard’s principles for investing success


Your roadmap to successful investing is based on four simple principles.


Create investment goals that are measurable, attainable, and have a long-term focus.

Buying a car. Helping your kids to get a good education. Enjoying a rewarding retirement. It’s important to plan your goals whenever you invest.

Without a plan, it’s easy to get distracted. You can end up trying to time when to buy or sell, chasing market returns, and missing out on long-term gains.

With a plan, you always know where you’re heading. That way, you can stay focused on your future goals.

  • You can spread your investments across a wide range of assets.
  • You can choose whether you’re aiming to track or beat the markets.
  • You can rebalance your investments regularly to stay on track.

And you can make sure you don’t pay more in investment fees than you need to.

So whether it’s buying a car, education expenses, or a comfortable retirement, you’ll have a better chance of achieving investment success if you keep your eyes on your goals at all times.

Your investment strategy should be aligned to your goals and well diversified across a mix of different types of assets to help reduce risk.

Let’s face it, there’s no guarantee any investment doing well this year will do well next year.

In fact, the best-performing asset type one year can sometimes be the worst-performer in the following. Successful investing benefits from having a good balance.

Rather than trying to pick the winning investment each year, spreading your investments across a wide variety of assets will help reduce the risk of loss. Investors who are well diversified tend to enjoy a smoother investment ride over the long term.

When it comes to investing, every dollar you pay in costs is a dollar out of your future returns. If you focus on low-cost products it will help increase your results over time.

It’s quite simple really. While you can’t control what happens on markets, there’s one very important thing that you can control. That’s the amount you pay in fees to invest.

In fact, when you’re investing, you get what you don’t pay for. Every dollar that you don’t have to pay in fees and costs is a dollar more in your pocket. In other words, the lower your costs the greater your share of an investment’s return.

A few percentage points here or there may not seem much. But over time, thanks to the magic of compounding, this can really add up. Fast forward a few years and you can find it translates into thousands of dollars less in your final investment.

With constant market news, it can be tempting to make impulsive investment decisions. Discipline and perspective can help you remain committed to your long-term goals.

Fear. Greed. Panic. People don’t always behave rationally, especially when it comes to money.  When markets go down it’s tempting to run for the safety of lower-risk investments, but then you can easily end up missing out on the rebound.

And when markets go up, it’s tempting to start chasing returns and moving more money into well-performing investments.

Making short-term decisions on the basis of daily market ups and downs can make it harder to reach your long-term goals.

Despite bumps along the way, investors with the patience and discipline to stay the course are well rewarded over the long term.