The Biz Bucks Blog provides former Biz Bucks students and other busy professionals with a summary and commentary of seminal articles from the opinion pages of the Wall Street Journal. You can be notified of a new posting by subscribing to the blog (enter email in box on right) or by following on Twitter: @BizBucksGuy.
Index Fund Giant Battles the Establishment May 21, 2015 11:00 AM | Tagged as Bogle
WSJ May 4, 2015: “Bogle vs. Grant in the Great Fund Debate” by Jason Zweig
The referenced article is about a debate between John Bogle, the father of the index fund industry, against James Grant, the editor of a publication for fund managers. Although Zweig proclaimed the contest a draw, the text of his piece seems to indicate otherwise.
As some Biz Bucks victims will recall, The Biz Bucks Guy informs some (longer) classes about the existence of index funds. While not providing investment advice, he explains the theory of why indexing makes sense for some people…for example, those who have a long term strategy and don’t want to have their investments “own” them, meaning they must constantly watch how the markets are treating them.
The debate was timely. Index funds now own about a third of total stock fund assets, up from 20% a decade ago.
Bogle pointed out the irrefutable evidence that indexers get 99.4% of the assumed 8% increase in stocks. Actively managed funds return about 72% of this increase.
Bogle also pointed out that at the break at the conference he was surrounded by fund managers who thanked him for his help in keeping their OWN portfolios healthy. These fund managers were indexing, and not using the very funds they managed!!
For those who want to know more about indexing, the Vanguard Company, which Bogle founded, is one source. Of course, as Grant argued, if stock picking is your passion and hobby, indexing is not for you.
[Although opinion is included, The Biz Bucks Blog is primarily written to former students of Biz Bucks training courses to encourage their daily reading of the three opinion pages of the WSJ. This blog refreshes principles of Biz Bucks courses and improves business acumen on topics not discussed in Biz Bucks training. To reiterate, this blog does not provide investment advice to anyone.]
Posted in Investing | 0 Replies
To receive email updates when a new post is made, please enter your email address in the box below and click Subscribe.
Use these key words to search past blogs:
1994 97% Alesina Recession Alinsky Allesina austerity Baloney BAT Binz bird kills Bogle Border Adjustment Tax Brulle Bryce capitalism carbon Carbon Dioxide CBO CFTC chains China Churchill Climate Climate Change Clinton Comparative Advantage Crichton Cronyism Cummins Curry Darwin Death panel demographics population economics Denier derivatives Dodd-Frank Drug dynamic Dynamic Scoring education electric car Energy Energy Policy Enron Debt Entitlements Eugenics Fat Fry Flat Earthers fracking free markets free trade Free Trade E-Verify Free Trade Zoellick Freedom Heritage Foundation Friedman gas lines Gas Prices glaciers Global Warming Global Warming Sustainability global warming subsidies IMF Globalization Trade God Google Gore Gramm Green Blob Grifo Groupthink Growth Hannity Hayek Hostess Hybrid Immigration Imports index funds Indexing Intellectual Denial investing investment IPCC JFK Joint Tax Kennedy Kerry Keynes Keynesian Keynesian Tax Cuts King Barak Bird Kills Koch Koonin Laffer Lamar Smith Lomborg macroeconomics macroeconomics;static; dynamic MACT Makiel markets Marxist medical care minimum wage Mitchell Model T Moore Morgenthau Navarro Neumark NOAA NY Times Obamacare ObamaCare Rove Health Insurance O'Reilly participation rate Patrick Moore peer review Peer Review EPA Piketty Pipelines plywood Presidential authority Price Controls Pruitt Racial divide Rare Earth Reagan Recession REE Renewable Portfolio Standards Renewables Ricardo Ridley robotics RPS Ryan Schlaff Science science integrity scoring Settled Science Shaffer shortages socialism socialized medicine Solar Panels Solvaldi Sovaldi static steel STEM Stephens Steyer stimulus subsidies subsidy sugar Supreme Creator tax policy tax reform Taylor territorial taxes corporate taxes Tesla Trade train wreck Trump unemployment wages Wind wind power women Zuckerman