Went a Vanguard seminar back in the early 90's and thought they made a lot of sense. Until this day fund managers to the tune of around 75% of them still under perform the markets. I hold a Vanguard ETF and I am very happy the way it works and the way it provides me quarterly income and it's totally hands off. I remember in the bad old days of having to pay a fee to get into a managed fund and then get done over again and pay a 1% MER along the way as well.
Jack Bogle, yes what great man and great company he set up. Simple ETF's for everybody with very low fees, thank you. Rest In Peace.
I don't know much about Bogle but from the few interviews, especially one linked below, the man sounds like a very admirable, humble man.
If there's a criticism, and this is not towards Bogle himself, but a criticism of Index Funds... and even then it's not really a criticism of Index Fund as it is not their intention or design...
Anyway, a criticism would be that strict adherence to Index matching funds have been exploited and been use to give the wrong impression about investing.
1. That since Index Fund beats practically all funds managed by highly trained, intelligent and capable money professionals... what chance does a common layman on the street have of hoping to invest intelligently in the stock market?
So best to just ignore the stock market; or if you have spare funds, super etc., just hand it over to the smart professional to have a chance.
I've actually read and seen many investment writers, commentors on Graham etc., saying this exact thing. That is, the smart monies barely does a good job; what chances do you lay people have? So stop being a try hard and do something you're actually good at.
While not everyone have an interest in stock investing... to say that they couldn't do it even if they wanted to is just wrong.
Wrong in a putdown... more important, wrong in the consequences of not having common folks directly owning corporations themselves. Thinking, voting, deciding what industries and what practices they endorse with their capital investment... not letting them owning a share in the general wealth of the country.
Again, Mr Bogle didn't set out meaning to do that. He certainly have saved investors and retirees hundreds of billions in fees. And heck, not a lot of people can hope to achieve that kind of deal for people and their retirement.
So, again, not critising the man. Just saying that his work has been made and interpreted that way.
2. Indexing mean replicating the portfolio to the same portion, weighing, of stocks in the Index.
This have led to privateers and corporate raiders abusing the trillions of dollars the index is "managing".
By pricing a stock with enough brand name, enough of a good story... high enough to get into the index; spruikers pretty much guarantee that index funds will buy into them.
When the price drop due to some (short term) disappointment; the stock will be offloaded.
The buy in and sell off from Index Funds add to the momentum of a stock. On the way up it buy high, causing some others in the market to also buy at high... The way down also cause losses quite dramatically. If strong enough, the company will be raided and taken over.
So business managers who are innovative and daring, taking on new ventures to push their corporations further... If they were to miss the target, they better not miss by too much or for too long else the stock price will crash and their company be taken over.
I'm sure that had always happen, but now, seems a whole lot faster; less patience from investors.
Anyway... I thought it's a great interview. The man sounds like a very decent human being.
This man really helped to level the playing field for retail investor like us when it comes to index fund investing. Thank you Sir. Bogle. Rest In Peace or come back as another revolutionary human being.