Buy the market not the stock
Buy the market not the stock
Robin Bowerman is the Head of Corporate Affairs at Vanguard and a member of the Executive Team. Robin is also Vice Chair of the SMSF Association.
Vanguard is a pioneer of index investing something we explore and explain during this interview.
Before joining Vanguard, Robin was a leading financial services writer, commentator and editor.
Robin co-authored the book Wealth of Experience with Jeremy Duffield, Vanguard Australia's ex-Chairman and founder. That book dealt with the many mistakes made by investors.
In this episode of Shares for Beginners we talk about these mistakes including the "past performance mistake", and the reasons we're not wired to be good at investing. The example Robin mentions is how much more difficult it is to buy a share that has dropped 30% compared to buying a TV that has been discounted by 30%.
There were great opportunities to buy shares cheaply during the GFC (the Great Financial Crisis of 2009) but who was brave enough to buy when the world seemed to be coming apart at the seams.
We hear about Jack Bogle the founder of Vanguard Investments who passed away earlier this year. This is an excellent obituary about the man who championed the cause of smaller investors by reducing costs and benchmarking returns to the indexes. When he started his funds he was criticised for "guaranteeing mediocrity" and that his investment style was "unAmerican". And yet even in death he still saves investors billions of dollars each year.
We have our first listener question about things to think about when considering a Self Managed Super Fund. Robin mentions these resources to help you understand whether an SMSF is right for you.
There's also a mention of the Vanguard Interactive Index Chart. It's great to play with and learn more about the performance of major asset classes since 1971 and the effects of events on markets.
Robin is a great guy and a clear communicator about markets, shares and investing. As always I learnt a lot and I hope that you can pick up some great information as well in our shared investment education journey.
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Shares for Beginners is for information and educational purposes only. It isn’t financial advice, and you shouldn’t buy or sell any investments based on what you’ve heard here. Any opinion or commentary is the view of the speaker only not Shares for Beginners. This podcast doesn’t replace professional advice regarding your personal financial needs, circumstances or current situation.