John C. “Jack” Bogle's advice for defined contribution plan participants is not to open their account statements until right before they retire and ignore the market.
“Investors are their own worst enemies,” said Mr. Bogle, the founder and former chairman of Vanguard Group, during a presentation at Pensions & Investments' Investment Innovation and the Global Future of Retirement conference in New York.
Mr. Bogle borrowed a phrase from William Shakespeare when he said global markets are “full of sound and fury, signifying nothing,” noting that focusing on short-term market movements is futile.
Rather than open their DC plan statements monthly or quarterly, Mr. Bogle stressed that “the excitement (plan participants) will feel when they open that last statement will far exceed the boredom of indexed management. They will be amazed at how big their accounts are!”
Mr. Bogle has been a defined contribution participant since 1951, when he joined Wellington Management and earned $250 per month at his first job out of college. His DC assets rolled over into Vanguard balanced index funds after he started the company and have remained there ever since, he told Barbara G. Novick, BlackRock's vice chairwoman and chairwoman of the firm's government relations steering committee, during their lunchtime chat at the conference.
“You would not believe how it has grown,” Mr. Bogle said. He said his defined contribution plan account is his largest single asset, without giving its exact size.
Mr. Bogle remains an active employee at Vanguard, which means his DC account “just keeps growing tax-free.”