The John Bogle Blog and His Financial Article About ETFs
John C. Bogle’s Blog and his article about ETFs
This article is a heads-up to people interested in investment blogs and personal finance blogs.
John C. Bogle, the founder of The Vanguard Group, Inc., has a blog called The Bogle eBlog. (If you are wondering about “eBlog,” it is an anagram of Bogle.) Mr. Bogle just posted an excellent article about the proliferation of exchange-traded funds (ETFs), which is a reprint of his Op-Ed article in today’s Wall Street Journal. If you are not a WSJ subscriber, you can find a link on his blog to a .pdf file of the full article.
His article is titled, ‘Value’ Strategies. In it, Mr. Bogle states that ETFs can be interchangeable with classic index funds, but only if you select and manage them in a manner in keeping with the original rationale for index mutual funds. This rationale includes very broad market diversification, very low costs, and buying-and-holding to match closely the broad market’s return. However, the current ETF market place seems to be heading in directions that are probably not in the best interests of individual investors. The proliferation of hundreds of ETFs has lead to positions in extremely narrow market segments, higher management expenses, and higher trading costs for the average ETF.
I wanted to make you aware of Mr. Bogle’s excellent ETF article and his blog, so I will stop at this high level summary. If you want to read this very informative article, click on one of the links above.
In addition, here is an idea for bloggers. Unfortunately, at this point Mr. Bogle’s blog is a bit hidden in the cyberweeds. However, I am also guessing that Mr. Bogle feels little need to spend time trying to drive up his link counts. Bloggers can help to make his blog more prominent. I suggest those of you who have blogs and are willing to do so put a link to Mr. Bogle’s blog in your blogroll. If enough of us do this, it will lift his blog ranking. The link to “The Bogle eBlog” is http://johncbogle.com/wordpress/
I suggest we do this, because what Mr. Bogle publishes on his blog is likely to be of interest to many financial blog readers. He is one of the truly honest men in the financial world. I personally I have tremendous respect for Mr. Bogle’s contribution to the financial welfare of individual investors. While index funds are an obvious financial idea to almost everyone now and they hold 10% of total mutual fund assets, in the 1970s most people in finance thought that indexing was completely nuts. If you want to understand the environment of that time better, I suggest that you read “The Constellation” chapter of Peter Bernstein’s book, Capital Ideas. In that chapter, he discusses the resistance to the very earliest index fund pioneers at Wells Fargo who tried to launch an index fund, the Stagecoach Fund, which really did not get off the ground and died in the bear market of 1974. Mr. Bogle finally got the first successful index fund off the ground beginning in 1975.
Tags: index mutual funds
Personal Financial Planning
- Automated Tool Aligns Your Investment Risk Tolerance and Asset Allocation (Check out this automated tool for aligning your investment risk tolerance and asset allocation - A Tip from The Skilled Investor
Your tolerance for investment risk is a relative thing. Few people like investment risk, but some can handle it better than others can. The more investment risk you are willing to tolerate, the higher your [...])
- The Birth of Yet Another Darn Asset Class – Infrastructure (The Birth of Yet Another Darn "Asset Class" - "Infrastructure"
Recently, The Skilled Investor published two articles:
The first article discussed how the financial industry keeps manufacturing new asset classes for brokers and investment advisors to sell to individual investors. The Skilled Investor raised the question of whether these new asset classes are likely to serve the [...])
- The Quality and Cost of Advice Paid by Investment Sales Loads – Part 2 (
Can you really get free and objective investment advice, when you pay investment sales loads? (Part 2 of 2)
Excessive investment costs and investment expenses are a plague on your lifetime personal financial planning.
Excessive investment expenses are one of the most significant barriers to lifelong family financial security. While financial services industry sales people tell you [...])
- How unstable have stock market returns been over time? (Common stock equity market returns have varied widely in the past. The common stock equity risk premium has averaged about 4.1% from 1872 to 2000.
The equity risk premium is the equity market return less the risk free rate of return. The risk free rate of return includes both the inflation rate and the risk free [...])
- Passive Personal Investment Strategies are More Time Efficient with Better Returns and Risk Control (
The scientific investment literature indicates that passive investment strategies usually are more time efficient, while they also increase returns and add more value to your investment portfolio.
For example, given the diversification imperative, it is highly questionable whether the vast majority of individual investors should own any common stocks or bonds directly. Instead, they can achieve [...])
- How to Lie with Statistics – Investment Performance Charts (How to lie with statistics: Investment performance charts - A Tip from The Skilled Investor
Darrell Huff wrote a short and very informative book, "How to Lie with Statistics," which was first published in 1954 and was amusingly illustrated by Irving Geis. This book is still in print and remains very popular (Amazon book rank #2,040 [...])
- Comparing the Quicken and VeriPlan Lifetime Financial Planners (Comparing the Quicken and VeriPlan Lifetime Financial Planners
The Quicken personal finances organizer application includes the Quicken Retirement Planner, which projects the personal finances of a person or family across a lifetime. VeriPlan is a comprehensive and fully automated personal financial lifecycle planner for individuals and their families.
In this series of short articles, The Skilled Investor [...])
- DWS S&P 500 Index Fund (SXPAX) receives a +1 Fund Authority Score (The table below presents The Skilled Investor's Fund Authority Score and other information for the DWS S&P 500 Index Fund (SXPAX).
The Scudder Equity 500 Index Fund (BTIEX) and the DWS S&P 500 Index Fund (SXPAX)
The Skilled Investor has published an article about lower cost S&P 500 index mutual funds that you can read, which is [...])
- Are Your Financial Planning and Investing Strategies Scientific? (
Your financial planning and investing strategies should have a scientific basis
A previous article, "The Solution - ONLY follow financial strategies that are scientific, passive, diversified, savings focused, risk controlled, low cost, and tax efficient," suggested that individuals are much better off with a well-considered financial viewpoint. A stable set of financial beliefs can help you [...])
- Avoid Very Large Actively Managed Mutual Funds (
Avoid very large actively managed mutual funds
Big actively managed mutual fund portfolio positions and higher percentage ownership of any company’s bonds or common stock are not good things for actively managed mutual funds. Nor, are these big positions and high percentages good for you.
Large portfolio size constrains how efficiently an actively managed mutual fund can [...])
- Schwab S&P 500 Index Fund – Select Shares (SWPPX) capture the Best +10 Fund Authority Score (
Fund Authority Scores rate mutual funds and exchange traded funds (ETFs) on the most important economic factors that influence individual investors' net long term diversified investment fund performance. The Skilled Investor developed the Fund Authority Score system to provide individual investors with concise, objective, and realistic summaries of mutual funds and ETFs for comparisons within [...])
- Analyze Multiple Personal Financial Planning Decisions Simultaneously with VeriPlan (VeriPlan allows you to analyze multiple personal financial decisions simultaneously
Personal financial and investment decisions are complex, because so many different factors are in play simultaneously. When an integrated financial software application like VeriPlan is developed by people who understand scientific financial projection methods, all these different factors can be measured and automated on a modern [...])
- Vanguard 500 Index Fund – VFINX – merits the Best +10 Fund Authority Score (The Standard & Poors 500 stock index is the most common equity index fund benchmark in the U.S. The S and P 500 tracks about 75% of publicly traded U.S. equity market asset value. The dominant issue in choosing among passively managed index mutual funds and ETF funds benchmarked against the S & P 500 [...])
- USAA S&P 500 Index mutual fund Member Shares (USSPX) capture a +9 Fund Authority Score (The table below in this article presents The Skilled Investor's Fund Authority Score and other information for USAA S&P 500 Index mutual fund Member Shares (USSPX).
The diversified investment fund strategy of the USAA S&P 500 Index mutual fund Member Shares (USSPX)
According to its prospectus filing on the U.S. Securities and Exchange Commission EDGAR system, the [...])
- Benefits of Traditional IRA Contributions for Renters (
In a series of articles, The Skilled Investor compares different lifetime financial planning projections for Fran and Fred Frugal to illustrate the relative value of adopting different financial planning strategies. Fran and Fred, both age 30, are a married working couple with $100,000 in combined annual earned income. (See the "Fran and Fred's Baseline Lifetime [...])
Comments are closed.