It’s the time of year when many of us make an effort to do better—eat healthier, exercise more, try something new. As the holiday bills come rolling in, financial goals may be on your clients’ minds as well. In a recent message to investors, I touched on a few resolutions to keep in mind this year. None of these resolutions will be a surprise coming from Vanguard, but my hope is more investors will take these themes to heart in 2016 and stay focused on the aspects of investing they can control.

Save more and pay less. The most important (and difficult) step investors can take to shore up their financial future is to save more than they think they’ll need. Today’s investing challenges require a renewed commitment to saving. We’re living in a slow-growth world, and Vanguard expects investment returns to be modest in the coming decade. For example, a 60% equity/40% bond portfolio earned an average return of 8.6% since 1926. We expect the central tendency of returns for that same portfolio to generate a 5%–7% return over the next ten years. When we take inflation into account, the average return is expected to fall in the 3%–5% range.1

Your clients can’t control market returns, but they can control how much they pay for investments. Consider framing costs as a percentage of returns. If a fund returns 4% but charges a 1% expense ratio, then investors lose 25% of their return to fees. As we like to tell investors, you get what you don’t pay for.

Stay balanced and diversified. Market volatility is always with us. Many of the conditions that contributed to fragility in 2015—sluggish global growth, geopolitical events, and economic uncertainty—will continue to influence the markets in the years to come. Investors can temper the effect of volatility by staying balanced among stock, bond, and money market funds, and by being diversified in those asset classes. It’s worth emphasizing that even in a time of low (and rising) interest rates, bond funds can bring an important element of stability to a portfolio.

Stay the course. Sounds easy, but we know otherwise. It never feels good to watch the markets go down, but it’s also part of being an investor. Despite what some pundits might say, no one can accurately time the highs and lows. As an advisor, you play a critical role in helping your clients avoid the temptation to make changes to their portfolio in response to ever-changing market conditions.

On the surface, these financial resolutions may seem simple, straightforward, and a little bit boring, but sticking to them in good times and bad can be hard for your clients. Help them tune out the headlines and hype, and keep them focused on the aspects of investing that are firmly in their control. We’re here to support you every step of the way.

1 Vanguard Global Economics Team, Vanguard Investment Strategy Group, 2015. Vanguard’s economic and investment outlook. Valley Forge, Pa.: The Vanguard Group.


All investing is subject to risk, including the possible loss of the money you invest.

Investments in bonds are subject to interest rate, credit, and inflation risk.

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