“The stock market is a giant distraction to the business of investing.”

Jack Bogle talking to Charles Rotblut in an interview for the American Association of Individual Investors, emphasis mine…

Whether the market is efficient or inefficient doesn’t matter as long as you get costs out of the way, invest for the long term, and pay no attention to the foolishness that goes on in the short term in the stock market. In one of the better sentences I’ve written, it was in “The Little Book of Common Sense Investing” (John Wiley, 2007), I said, “The stock market is a giant distraction to the business of investing.”

Of course it is! Think about this: The stock market is a derivative of the value of corporate America. The intrinsic value of a corporation can be estimated by the dividend yield when you purchase the stock and the subsequent earnings growth. It is corporate America that creates value; the stock market itself creates none. In fact, the stock market subtracts value, due to all the costs we pay to play the game. It’s a little bit like the casino, one might say. And I say that advisedly.

I don’t agree with everything Saint Jack says, but it’s sure great that we still have him around and razor-sharp at that.


Achieving Greater Long-Term Wealth Through Index Funds (AAII)


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  1. Jeremy commented on Nov 24


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  4. Inspiring Insights, Invigorating Ideas commented on Mar 29

    […] subjects that are so important to an investor’s personal success or failure in markets that, as Vanguard’s John Bogle describes it, are “a giant distraction to the business of […]