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
- Chance creates the illusion that individual investors can beat the stock market (
"Market efficiency" makes it very difficult for individual investors to "beat the market."
Making their own decisions, individual investors perform so poorly that on average their investment returns lag behind the returns that one would expect from random stock selection.
The average professional trader does somewhat better than amateurs do, and professionals probably do so, in part, [...])
- Commodity Futures in Your Investment Portfolio (Commodity futures in your investment portfolio - Is there really any future for individual investors?
The Skilled Investor's previous article, "Be wary of the new investment asset classes," voiced skepticism about many supposedly new asset classes. This article delves into the financial science behind this skepticism, as it relates to one of these supposedly new asset [...])
- I Want My Treasure Back Please (PIRATES OF THE CREDIT SEA - Part 3: I want my treasure back!! (Please)
What are my rights in the situation that I summarized in my previous article: "PIRATES OF THE CREDIT SEA: My Treasure Is Taken!"? Well, the answer is very simple. I have a contractual right to get my treasure back. I also have [...])
- What are My Credit Card Contract Rights? (PIRATES OF THE CREDIT SEA - Part 2: What are my rights?
What are my rights in the situation that I summarized in my previous article: "PIRATES OF THE CREDIT SEA: My Treasure Is Taken!"? Well, the answer is very simple. I have a contractual right to get my treasure back. I also have a right [...])
- Choose Lower Mutual Fund and ETF Management Fees (Choose mutual funds and ETFs with MUCH LOWER investment management expenses
Investment fund management fees can only be justified by individual investors, if higher net returns more than compensate for these fees. Sadly, this is most often not the case with actively managed equity and bond mutual funds and exchange-traded funds (ETFs). In addition, you have [...])
- A Financial Decision Tool That Becomes Increasingly Valuable Over Time (As a financial decision tool, VeriPlan becomes increasingly valuable with the passage of time
Summary: While VeriPlan is an genuine bargain because of its low cost, it is an even greater bargain, when you consider that VeriPlan has no built-in obsolescence and that it can be used productively for years. We have engineered VeriPlan, so that [...])
- 22 Ways to Avoid Financial Advisor and Investment Counselor Frauds and Scams (Avoiding financial advisor and investment counselor frauds and scams - Overview
The best way to avoid being defrauded or scammed by a financial or investment advisor is to investigate carefully several different advisers before hiring one of them.
If you carefully choose a financial adviser or investment counselor, you have a far greater chance of finding one [...])
- 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 [...])
- What is a Well-Diversified Investment Portfolio? (A well-diversified portfolio contains a very large number of individual stocks and/or bonds that are selected without bias toward particular economic segments.
A fully diversified portfolio will approximate the global publicly traded securities markets.
The question about diversification most frequently asked by individual investors is “how many stocks or bonds do I need to be well-diversified?” While [...])
- Investment Valuation and Securities Risk for Individual Investors (
The securities markets provide an evolving consensus of the risk-adjusted value of particular securities.
By understanding how the markets value securities, individual investors can chose more durable investment strategies
Judging the potential usefulness of different investment strategies requires some understanding of what the public securities markets really do. This article discusses how the markets price financial securities [...])
- Tax-Advantaged Retirement Investing Is Good for Most People (Tax-advantaged investing is very good for most people at most times
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 [...])
- 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 [...])
- Pay Lower Expenses To Get Higher Investment Returns – Part 2 (
Pay lower investment expenses to get higher investment returns
While financial services industry sales people tell you that you need to pay more to get more, the correct answer is the opposite.
Excessive investment costs are a plague on your personal financial planning. Excessive investment expenses are one of the most significant barriers to lifelong family financial [...])
- Advisor Costs and Strategies Determine Your Return on their Services (Financial advisor costs and the value of their investment strategies determine your return on investment from these investment advisor services
A previous financial article, “The Solution - ONLY follow financial strategies that are scientific, passive, diversified, savings focused, risk controlled, low cost, and tax efficient,” suggested that investors are much better off with a well-considered financial [...])
- 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 [...])
Comments are closed.