Jack Bogle

A short trip investment

This is a short story about the investment. He will explain how financial assets like stocks and bonds work. This story will help you understand how the growth of capital and the risks you face with each type of investment.

This is the story of a journey

We will be traveling in a car. The car, the more land we travel, weather and travel we have some very unusual features. Let me describe them.

Car

The car is called the drive from the capital. The initial size of the car represents the amount of capital that we invest. Over time you want your capital to grow. You want the size of your car capital increase. And when it rises, it expands and when it descends, it becomes smaller. The fuel it uses is your savings. As the car goes it uses less fuel and when it falls, it takes more fuel to stay the same size.

We can add fuel to our cars in the capital at any time, thus increasing its size.

It is a journey through time, so our forward motion or speed is constant. However, we can move the car to the will of different parts of the field. Now we will examine the ground, we travel on.

Field

This is a beautiful sight in front of us. Out of our right is a fast flowing river. It is called the river of inflation. Sometimes it overflows. Directly in front of us is a green field increases slowly toward the distant mountains on our left. The field undulates and rises slowly but steadily as he joins the chain of mountains.

In front of us is at the crossroads of three roads. The first runs along the River. It is level and smooth. It is called the Causeway cash. The road through the middle of fields and foothills. It is called Bond Boulevard. It is not as smooth as straight or cash and Causeway is a bit more adventurous. The latter crosses the mountain to steep and dangerous curves. This is called equity Way.

Weather

We will go to unusual weather. There is a fog that envelops the front of our car that obscures our view of the ground nearby. However, the fog disappears we look ahead. The longer we wait the car becomes clearer view. The view is absolutely clear behind us and we can see perfectly.

Let

Our car is ready, we have looked on the ground, and checked the weather. We are ready to begin our journey. You are the driver because of your car. There are other seats in the car so you can take others such as family members, friends or advisers, such as your accountant, but as you drive. You chose the road along the river best. It is picturesque, the road is smooth, and it seems safe.

So we go along the Causeway cash. Time has passed and our car is slightly bigger and everything is fine. It's a beautiful day and we were enjoying the trip so far.

You glance out the side window and see cars from other capital. There are many travel with us. There are a lot more ground than we are and their car is now greater than yours.

What is the problem? Why are we not the same size? The answer is cars to choose another path, a road that leads to a higher altitude, but is also far less comfortable.

You start to doubt your decision and wonder why your car is not as great as other cars that you see. They are already using less fuel. You are upset and concerned that you have made the wrong decision.

As we motor along we will see road signs installed to guide us on our way. We will also put up road signs of our own that will help us, and can help others as they follow behind us.

We must now put up our first sign. It reads as follows:

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