More Straight Talk on Investing. John J. Brennan

If you become interested in one of the funds mentioned here (or any fund or exchange-traded fund, for that matter), consult its prospectus before taking any action.

      Note that in the writing of this book, I sought to avoid investment jargon to the extent possible. In the appendix, you will find definitions of investment terms to help you along the way. When warranted, I employ call-out boxes titled Baseline Basics to make clear terms and concepts that will add to your foundational knowledge. You'll also come across Portfolio Pitfall sidebars, which offer caveats about common investor mistakes and cautions about questionable industry practices. At the end of each chapter, I wrap it all up with In a Nutshell—a bulleted summary of key takeaways.

      As you read this book, you'll encounter bolded passages that highlight key, stand-alone investing principles. These principles are condensed and summarized in the Afterword at the end of the book and serve as a handy compilation should you need to reference it in the future. In some ways, this compilation represents my off-the-cuff response when someone in a social setting—be it on the sideline at a grandkid's soccer game or at a dinner party—is looking for my high-level thoughts on successful investing. I hope you find these CliffsNotes, if you will, useful and practical, too.

      Finally, I use a considerable amount of data—market returns, hypothetical examples, and fund performance—throughout the book to support my points. (Due to production constraints, most of the data is cited through December 31, 2019. The addition of 2020 would not substantially alter the long-term data featured in the figures and text.) You need not be facile with advanced calculus, but having some faculty with numbers will help you become a better investor. I also draw on events; some may appear ancient or irrelevant to you. However, the wisdom offered by the past will help make you a sharper and more discerning consumer of investment products and services.

      I am pleased to report that all proceeds from the sale of this book will be donated to Vanguard's signature charitable initiative—the Vanguard Strong Start for Kids Program™. Strong Start for Kids invests in tomorrow by supporting the development, learning, and joy of young, especially underserved, children today. The program aims to create partnerships that advance early learning programming in Greater Philadelphia, Phoenix, Charlotte, and London, and focuses on respecting and building upon local strengths to ensure families, programs, and communities have the resources needed to help all children have the best possible start in life.

      An investment tenet emphasized in this book is similar to the approach that Vanguard takes to make a difference in the community: Investing early pays off. Research shows that investing in early learning opportunities for young children pays off in lifelong benefits. When children are supported during the first few years of life, they are more prepared to succeed in school, lead healthier lives, and contribute to creating stronger communities. But the reality is that significant barriers exist that disproportionately shut out some children from these meaningful opportunities. Strong Start works to increase access to a rich ecosystem of support so all young children are able to benefit and reach their full potential. Having spent much of my civic time on this endeavor, I can assure you that the return on an investment on high quality early childhood services would make most professional investors jealous!

Acknowledgments

      I'm amazed at how many people it takes to move a book like this from concept to reality—even if it's the second time around. And, of course, I'm grateful to all who have been part of that journey. I'll take the risk of naming names, with the full expectation that I will leave someone out, and for that, I apologize in advance.

      I want to start by thanking my collaborator, John Woerth. John is a three-decade colleague and, more important, a friend for all that time. It has been a joy to work with him on this book. He's a superb editor, a gifted writer, an astute observer of markets and investor behavior and, fortunately, a brutal taskmaster. I am confident that without that final character trait, More Straight Talk on Investing would still be mostly in my head.

      As with the prior edition, I want to acknowledge the wonderful, trusting investors at Vanguard, with whom it has been my pleasure to be associated for nearly 40 years. These investors—small and large; sophisticated and new to investing; beginning their careers and enjoying retirement—have demonstrated all the good traits that we try to articulate in this book. They are disciplined, long-term oriented, cost conscious, and continually learning how to be better investors. It's been a remarkable journey together.

      A second acknowledgment goes to my colleagues over the years at Vanguard, especially my two predecessors as chairman of our funds, the late Jack Bogle and Walter Morgan, as well as my successor as chairman, Bill McNabb. What a gift it was for me to be colleagues with Jack and Mr. Morgan, to learn from them, and have the honor of succeeding them. And throughout his career, Bill's engagement with investors and his commitment to their success and well-being is legendary. I have learned much from him from his first days as a colleague and continue to do so today as we discuss this topic as friends.

It has been an equal honor to serve with, and learn from, the thousands of Vanguard crew members who believe in Vanguard's mission and relish the chance to serve investors on their way to financial success.

      Our first version of this book could not have been published without the wonderful work of my collaborator, Marta McCave, and several members of our team of writers and editors at Vanguard, particularly Mary Lowe Kennedy and Craig Stock. More Straight Talk on Investing is built on the chassis that they helped construct, and I hope they'll be as pleased with this version as I was pleased with their work on the first.

      Numerous members of the Vanguard crew have provided statistical assistance and counsel, and I mention a few here. David Walker and Dominick Petruso, who did a remarkable job updating and developing the myriad statistics featured in the book. Many of their colleagues also contributed along the way, including Corinne Morrone, Michael Damico, Adam Schickling, Arvind Narayanan, Antonio Picca, Roger Aliaga-Diaz, Don Bennyhoff, Chris Tidmore, Andrew Hon, Jean Young, John Hollyer, James Rowley, Michael Johnson, Doug Grim, Dan Newhall, Jon Cleborne, Bill Oppelt, Ted Dinucci, Inna Zorina, and Hank Lobel. I thank them for their hard work in the background to ensure that we produced a high-quality book that will provide good value to our readers.

      I'm particularly grateful to three wonderful Vanguard investment professionals—Maria Bruno, Fran Kinniry, and Rodney Comegys—who took the time to read and comment on our final draft to ensure it met their standards of quality, which are high on all counts. And, finally, a hearty thanks to Tim Buckley, Vanguard's terrific CEO and my good friend, who endorsed and supported this project from the beginning.

      We relied on a number of data sources for this book, including Standard & Poor's, FactSet, Dow Jones, Frank Russell Company, Morningstar, Bloomberg, Morgan Stanley Capital International, the Investment Company Institute, the Federal Reserve Bank of St. Louis, and the Center for Research in Security Prices. Our thanks to all of them.

      Of course, none of this happens without a great support team. Vickie Leinhauser and Katie Kimmel have been of invaluable assistance to John and me throughout this project. Again, without their help, this project would have gone nowhere.

Two last points. First, I mention here, and often in the body of this book, the value of being a continual learner with respect to investing. I believe that's true whether you are 25 or 75; whether you are just starting out or have years of experience under your belt; whether you're an amateur or a seasoned professional. I love it when someone approaches me (usually starting out by being nice and saying, “Other than Straight Talk, which I loved …”) and then asks, “What would you recommend that I read to help me be a successful investor?” I usually mention three books. Winning the Loser's Game by Charles Ellis and A Random Walk Down Wall Street by Burton Malkiel are investment classics that have been continually updated, a tribute to their enduring value to generations of investors. Each had a significant influence on me before I began my career at Vanguard. The third book is a newer classic, first published in 1996, The Millionaire