Transcript

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 wish a swift and full recovery for 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 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 the business, I’ve seen many market storms. Re-pricings 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 their 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 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 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.

Amidst the uncertain world around us, I am confident that these tough times will pass and we will emerge stronger than before. 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.

 

Important information:

All investing is subject to risk, including possible loss of principal.

There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.

Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer’s ability to make payments.

Diversification does not ensure a profit or protect against a loss.

Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.