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Mr Bogle Says Buy


Saw this article on Wall Street Journal by Jason Zweig, “Why a Legendary Market Skeptic is Upbeat About Stocks. ” that talks about John Bogle being optimistic about stock market returns being better than many people expect..

John Bogle if you don’t know, is the founder Vanguard, which can be said to have started the whole craze into index funds as he kept the fund costs very low and helped to popularize this type of investment type.

At the moment, according to the Vanguard site, they are managing $1.6 trillion worth of mutual funds at an average expense ratio of 0.21%. Yes, it is that LOW.

I had read books about Bogle from the local library and his philosophy to indexing and investment is worth looking into.

So when he says something, people will listen. Especially since he is right most of the time also according to Jason Zweig.

In the article he blasted ETFs which are narrowly focused and utilize leverage to speculate. But I think he is talking about selected ETFs and not every ETF. There are those that are similar in nature to index funds. And there are narrowly focus index funds too.

His own portfolio is 80% bonds and 20% stocks which doesn’t really tally with his buoyant  outlook. A matter of not doing as what you are saying?

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Musicwhiz said...
October 21, 2011 at 7:34 AM  

ETFs are supposed to track the index, so your return should mirror that of the index. I feel that it is good if you are a defensive investor who is passive, but for enterprising investors, they should be able to devote more time to understanding their companies; and hence demand a return which is higher than market return. Of course, this is easier said than done!


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