A message from Vanguard’s CEO on the coronavirus

[MUSIC PLAYING] Hi. I’m Tim Buckley, Vanguard’s CEO. These are challenging times as the world prepares for and responds to the coronavirus outbreak. Like you, we’ve watched the rising numbers of those infected by the virus with concern, and we wish a swift and full recovery to those who are ill. We applaud the worldwide efforts to prevent further infections and tragic deaths. There is still much we don’t know about this epidemic. The health risk is real and the short term business impact has been significant. The economic consequences however, are unlikely to be long term. We’re seeing the markets plummet one day and bounce back the next, as investors process that uncertainty. At Vanguard, we’re known for counseling investors to stay the course, in good times and bad, which means keeping a long term perspective and focusing on the parts of investing you can control, such as diversification, balance and cost. Now stay the course is an easy commitment when markets are calm and steadily moving upward, as they have been for more than a decade. It’s much harder to stay disciplined in today’s environment as markets fluctuate and the near-term future is uncertain. We preach diversification so you can weather these tough times and stay invested. In my 30 years in this business, I’ve seen many market storms. Repricings are inevitable, sometimes violent, but never predictable. Panic and rash action aren’t your ally. Those who cash out find it impossible to know when to get back in. Indeed, investors that deviate from the long term plans, typically regret it later. The coronavirus epidemic itself was not something we could predict, but we constantly prepare for unexpected bouts of volatility. Our experienced investment teams know how to navigate difficult markets. Our active managers often find long term growth opportunities as markets sell off. Our index managers ensure proper liquidity as many wise advice strategies rebalance into the downturn, selling bonds and buying equities. Vanguard investors have proven time and again they know how to stay calm in a market downturn. But for those who are weathering their first bout of market volatility, or those who could just use a friendly reminder, let me offer three quick points. First, we stand by our mantra, stay the course. An investment plan established during calmer times should not be abandoned in the midst of a market downturn. Let the benefits of diversification play out. I know how difficult it is to see hard earned savings diminish, but don’t be tempted to time the markets. It’s a losing strategy. Our studies have shown that chasing returns has historically destroyed 1.5% a year of someone’s return versus staying the course. Second, we are here to help. Whether you’re new to investing or a seasoned financial advisor, Vanguard is here to support you. Our websites are constantly refreshed with our latest thinking on the markets and economy. And our experts offer practical advice on how to put this perspective to work in your portfolios. For more specific requests, our crew are ready to assist you. Don’t feel like you need to go it alone. Our mission is to help you succeed, so reach out if we can be of help. And finally, thank you. Thank you for entrusting us with your financial success. It’s a tremendous responsibility that we take very seriously. Admits the uncertain world around us, I’m confident that these tough times will pass. Valuations were high. The markets have repriced, but your long term growth prospects remain sound. As always, we look forward to partnering with you no matter the market conditions and helping you reach your investment goals. Thank you. [MUSIC PLAYING]

19 Replies to “A message from Vanguard’s CEO on the coronavirus

  1. "Time is your friend, impulse is your enemy" used to say jack bogle. Stay the course… It s difficult to avoid trying to time the market. Thanks for your advice in rough time. You definiteley work in favor of your clients. Thanks tim, thank you vanguard…

  2. I am a new investor. I bought in 2 weeks ago at the all tim highest price. One week later the crash. I sold everything. I am very disappointed in myself. I should not have sold because that was a mistake. I went against everything Jack has been teaching for decades. I am buying back in now and I make a promise to myself that I will stay the course from now on know matter what happens.

  3. Thank you Tim for your leadership & reassurance in this crisis.
    Everyone we have seen this movie before market will go down & back up this is part of normal investing cycle so – STAY THE COURSE & DON'T PANIC – .
    B.T.W If one can now market is down, it is time to invest your 2019 IRA until April 15 2020, Your 2020 IRA contribution, & buy some ETF VTI & VOO.
    All the best !

  4. Always stay the course!  

    This is precisely why a free market economy always is preferred — and why all those folks from as far away as India, China and Iran immigrate here (they're sure as heck not trying to get into Russia or Turkey or even Japan).

  5. Keep my invested money in VGT,VHT as very long term investments. Awesome sector specific ETFs. In technology&healthcare we trust.

  6. I panicked a bit and diversified. I was 85% VTSAX and 15% VBTLX. I added VTWAX and will break it down to 60% VTSAX, 25% VTWAX 15% VBTLX. I am 19 years away from retiring at 60. I also contribute 20% to my TSP. My only financial regret in life is not investing like this during 2008 and the years after it.

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