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.
Personal Financial Planning
- Commentary on How Many Mutual Funds are Needed for a Well-Diversified Portfolio (
For holding periods of many years, diversification improves dramatically, when you hold multiple actively-managed mutual funds in an investment portfolio.
In "How Many Mutual Funds Constitute a Diversified Mutual Fund Portfolio?," Professor Edward O'Neal of the University of New Hampshire at Durham tackled the important question of how much an investor could improve on diversification by [...])
- Own Investment Mutual Funds and ETFs – Not Individual Securities (Own Investment Mutual Funds and ETFs - Not Individual Securities
Owning individual stock and bond securities is just a big waste of your valuable time and money
Individual investors tend to be terrible investment portfolio managers. Almost everyone can hire an index fund manager to do a much better job for far less time, money, risk, and [...])
- March 12 2007 Edition of the Carnival of Investing (
The Carnival of Investing - March 12, 2007 Edition
Welcome to the March 12, 2007 edition of the Carnival of Investing!
We have a smorgasbord of articles from which you can choose.
I have sorted the articles into three categories below:
* Editors Choice,
* Honorable Mention, and
* Straying a Bit, but still interesting.
Enjoy your feast,
The Skilled Investor
- Avoid High Turnover Mutual Funds and Active ETF Trading (Avoid investment funds with higher investment portfolio turnover
The problem with high turnover is that higher fund trading adds substantial hidden expenses that drag down returns.
Because short-term trading is a zero sum game (before costs) played against other well informed traders, greater turnover is far more likely on average to result in lower fund returns instead [...])
- Excessive Investment Expenses Take 2% of Individual Investor Assets Every Year (Excessive investment expenses take 2% of individual investor's assets every year
Year after year, millions of people lose large amounts of money on unnecessary and unproductive investment costs and investment expenses.
The typical investor loses about 2% of portfolio assets every year by paying too much and getting too little in return.
This wasted 2% is not a [...])
- The Value and Opportunity Cost of Your Personal Investment Management Time (
Your time is valuable, and it should be included in calculations about your investment returns.
Whether you add or subtract value from your assets when you spend time on investment activities should also be evaluated. Some investors spend significant time on the wrong strategies. Instead of adding value, their efforts reduce their investment portfolio performance and [...])
- Searching for Superior Investment Fund Managers is a Waste of Your Time (
Searching for superior investment fund managers is a waste of your money and time
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 [...])
- 2006 and 2007 Personal Income Tax Rates for the 50 States and DC (
2006 and 2007 personal income tax rates for the 50 states and D.C.
The Skilled Investor has made available for downloading a spreadsheet that contains graduated personal income tax rates and other personal income tax rate information for the 50 states and the District of Columbia.
If you want to know about specific U.S. state personal graduated [...])
- 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 [...])
- How Many Mutual Funds are Needed for a Well-Diversified Portfolio? – Evidence (Actively-managed mutual funds are not created equally. Performance can vary significantly - even when funds pursue similar strategies or "styles."
This article addresses the impact on portfolio diversification of holding more than one actively-managed mutual fund. (For the companion article to this, see: How many mutual funds are needed for a well-diversified portfolio? – a commentary)
- The Cost of Investment Counselors When You Pay Investment Sales Loads (How expensive is financial advisor compensation paid via sales loads?
A sales load might be the method that you prefer to compensate your broker or advisor. If your advisor is truly competent and ethical, he may be able to manage properly the inherent conflicts of interest that are associated with commissioned investment product sales. Even if [...])
- Best Personal Finance & Investment Articles (Best Personal Financial Planning and Personal Investment Articles this Week from Personal Finance Blogs
Carnival of Financial Planning - Edition #173 - February 25, 2011
Welcome to the February 25, 2011 Edition #173 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 [...])
- Traditional IRA and 401k Versus Roth IRA and Roth 401k Contributions (Traditional IRA and 401k versus Roth IRA and Roth 401(k) plan contributions
Many taxpayers puzzle over whether to contribute to traditional versus Roth tax-advantaged retirement plans. For most people, contributions to traditional tax-advantaged plans will probably provide a higher net present value over their lifetimes.
Given our tax-related software modeling capabilities, The Skilled Investor has some observations [...])
- Diversify with Low Cost Index Mutual Funds and ETFs Only (
During the last twenty-five years of the 20th century, mutual fund and exchange traded fund portfolio assembly costs declined dramatically.
Brokerage commissions were deregulated in 1975, and transaction costs have fallen very dramatically since then. Furthermore, well-diversified, low-cost index mutual funds have now become commonplace, while none existed in 1968. The mutual fund industry was still [...])
- When to Take Social Security Retirement Benefits (When to Take Social Security Retirement Benefits?
Concerning when to take Social Security retirement benefits, the Boston College Center for Retirement Research has some research in their publications section that addresses this subject. In particular, see "SHOULD WE RAISE SOCIAL SECURITY’S EARLIEST ELIGIBILITY AGE" by Alicia H. Munnell, Kevin B. Meme, Natalia A. Jivan, and Kevin [...])
Comments are closed.