Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Economist Paints Dramatic but Dull Picture of Bogle Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, September 14, 2012

Economist Paints Dramatic but Dull Picture of Bogle

News summary by MFWire's editors

"IN A world marked by high-frequency trading and billionaire fund managers, Jack Bogle ploughs an increasingly lonely furrow."

No, that is not a movie trailer, it is the opening to the Economist's review of Vanguard [profile] founder's Jack Bogle's new book. Read the rest if you have a password. If you don't:

The review hits all the high notes — "mutually owned Vanguard", "remorseless focus on keeping costs down", "double agency problem". You have heard it all before.

Even the Economist admits that the book "echoes many familiar themes" and that it even excerpts the Economist itself.
But those themes are worth repeating, because they are too often ignored. Investors spend so much time chasing hot asset classes and hot fund managers that they end up buying high and selling low, all the while incurring transaction costs. In Mr Bogle's words, "investors need to understand not only the magic of compounding long-term returns, but the tyranny of compounding costs."
Mutual fund executives are also targeted in the review:
Those mutual-fund managers are pretty poor stewards, rarely voting against the actions of executives. And they have an incentive to expand the amount of funds they manage, even though such expansion has not benefited their existing investors. The assets of the mutual-fund industry have risen from $5 billion in 1960 to $6 trillion at the start of this year, but the annual expense ratio of the average equity fund has risen from 0.5% to 0.99%. If economies of scale have been achieved, they have not been passed on to the individual investor.
The review gives Bogle the final word:
It is hard to disagree with Mr Bogle that the "system of retirement security is imperilled, heading for a serious train wreck." But will anybody listen to him, when they haven't in the past?
Again, none of this is new, but the book and the review of it are worth paying attention to, if only because of the reputation of the messengers. 

Edited by: Sean Hanna, Editor in Chief


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2024: Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use