Quotes from Charles D. Ellis

That's it: work longer, fix Social Security, save more through 401(k)s, and consider using home equity. These steps are all doable, and they should all seem familiar.

Most institutional and individual investors will find the best way to own common stock is through an index fund that charges minimal fees. Those following this path are sure to beat the net results [after fees and expenses] delivered by the great majority of investment professionals."1 —Warren Buffett, chairman of Berkshire Hathaway

THE PRINCIPAL REASON WE SHOULD ALL ARTICULATE OUR LONG-TERM investment policies explicitly and in writing is to protect our portfolios from ourselves.

As market expert Jason Zweig puts it, "If we shopped for stocks the way we shop for socks, we'd be better off." We are wrong when we feel good about stocks having gone up, and we are wrong when we feel bad about stocks having gone down.

successful firms do flourish by holding fast to fundamental values: sticking to the right path; taking the long-term view; and insisting always on quality and excellence.

Faced with the choice of changing one's mind versus proving that there is no need to do so, almost everyone opts for the latter.

When the New York City pension funds began investing in index funds in the mid-1970s, the New York Times, in an article entitled "Why Indexing Frightens Money Managers," quoted Dave H. Williams, then chairman of the investment committee of Mitchell Hutchins & Company: "It's an avenue for seeking mediocrity.

Like the weather, the average long-term experience in investing is never surprising, but the short-term experience is always surprising.

Let's start with working longer. Many of us are healthier and have less physically demanding jobs than our parents and grandparents. And we are living much longer. So stretching out our work lives is a sensible option. And the payoff is eye-popping! Individuals who delay receiving Social Security benefits from 62 to 70 increase their monthly benefits by a full 76 percent. Government

If making mistakes is the inevitable cost of striving, correcting mistakes—and learning how to avoid repeating them—is the best measure of a learning organization that will continue to get better and better.

Emerging markets investing, where Capital is far and away the world leader1 came very close to never happening. "David Fisher is the one who said, 'This is where the future lies. Let's go for it!'" explains Bob Kirby.

The great advantage of indexing investment operations is that we can avoid the vain search for superior performance and concentrate our time and energy on investment policy and asset-mix decisions. Instead, it focuses your attention on the most important decision in investing: defining the long-term "policy" portfolio that will both minimize the risk of avoidable mistakes and maximize the chances of achieving your true investment objectives.

Even though most investors see their work as active, assertive, and on the offensive, the reality is and should be that stock and bond investing alike are primarily a defensive process. The great secret for success in long-term investing is to avoid serious losses.

Don't pay more per share for a company's stock than you'd be willing to pay if you were buying the whole company.

Before examining the many powerful changes in the investment climate, let's remind ourselves that active investing is, at the margin, always a negative-sum game. Trading investments among investors would by itself be a zero-sum game, except that the large costs of management fees and expenses plus commissions and market impact must be deducted. These costs total in the billions every year. Net result: Active investing is a seriously negative-sum game. To