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.

Related Personal Finance Reading:

The Battle for the Soul of Capitalism

The Complete Guide to Investing in Index Funds: How to Earn High Rates of Return

iMoney: Profitable ETF Strategies for Every Investor

Index Mutual Funds: How to Simplify Your Financial Life and Beat the Pro's

Create Your Own ETF Hedge Fund: A Do-It-Yourself ETF Strategy for Private Wealth Management (Wiley Finance)

Related Personal Financial Planning Posts

• May 10 2007 Edition of the Carnival of Financial Planning ( Carnival of Financial Planning - May 10, 2007 Edition Welcome to the May 10, 2007 edition of the Carnival of Financial Planning. The Carnival of Financial Planning takes a long-term view of personal financial planning for individuals and families. We focus on efficient and sustainable personal financial planning practices that can lead to lifetime financial security. This [...])
• American Balanced Fund - Class A Mutual Fund Shares (ABALX) collect a +1 Fund Authority Score (The table below in this article presents The Skilled Investor's Fund Authority Score and other information for the American Balanced Fund - Class A Shares. The diversified investment fund strategy of the American Balanced Fund - Class A mutual fund shares According to its prospectus filing on the U.S. Securities and Exchange Commission EDGAR system, the investment [...])
• May 31 2007 Edition of the Carnival of Financial Planning ( Carnival of Financial Planning - May 31, 2007 Edition Welcome to the May 31, 2007 edition of the Carnival of Financial Planning. The Carnival of Financial Planning takes a long-term view of personal financial planning for individuals and families. We focus on efficient and sustainable personal financial planning practices that can lead to lifetime financial security. This [...])
• 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 [...])
• Understand the Confusing Securities Market Motion Picture ( Securities markets are usually very quick to adjust prices to reflect new information. However, this price adjustment process may take longer and be more volatile, if the new information is ambiguous. At any point in time, market participants will already have used more or less rigorous valuation methods to judge their expected risk-adjusted value of securities. [...])
• Avoid Mutual Fund and ETF Sales Commissions and Fees ( Avoid mutual funds and ETFs with sales commissions and marketing fees Summary: There is no convincing evidence that sales loads and other sales fees charged to investors result in higher mutual fund and ETF performance. In fact, the opposite has repeatedly been proven true with mutual funds, which have a long performance history to evaluate. Paying a [...])
• Fidelity Spartan 500 Index mutual fund (FSMKX) achieves 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 [...])
• Taking the Snake Oil Out of Mutual Fund Evaluation ( Superior mutual fund and ETF performance charts are the sales tools of modern financial snake oil salesmen Historical performance charts allow investment fund promoters to market selectively their supposedly superior funds and to allege that their excessively high fees are worth it. Lured in by superior past performance, most often individual investors will get mediocre future [...])