Clients and friends of James Harvey gathered recently to hear a talk by Peter Westaway, Chief Economist at Vanguard at the Churchill War Museum in Whitehall.
Peter’s message was clear. Although there seems a tangible sense that the economic outlook is improving, no end of charts with numbers proceeding in the right direction can be relied upon. There are still too many uncertainties and therefore risks.
Without a crystal ball, it can be risky to leave your portfolio reliant on a particular scenario playing out. It is better to adopt a robust and diversified strategy that reflects an appropriate response to uncertainty. There will always be enormous benefits gained from holding a diversified portfolio, one diversified in terms of equities and fixed income and in terms of assets from different regions. Although, it’s tempting to try and do better, doing better is very difficult. A more predictable strategy is to stay diversified and stay the course.
Vanguard is one of the world’s largest investment companies, offering a large selection of low-cost mutual index funds.
Founder John C. Bogle structured Vanguard with just one purpose—to build wealth for its clients. Vanguard redirects net profits from economies of scale to fund shareholders in the form of lower costs, an arrangement similar to that of a credit union or a traditional mutual insurance company. Sales commissions were eliminated, and operating expenses were kept low. And, soon after its founding, Vanguard opened the first index mutual fund, launching the era of low-cost index investing.