Index Funds Will Be Fine

A recent Bloomberg article by columnist Barry Ritholtz argues that, despite the maturation in index investing and a slowdown in inflows to passive funds, “indexing is still giving active funds plenty of competition.” The decade following the financial crisis, writes Ritholtz, saw “rivers of money gushing into the three biggest indexers” (Vanguard, BlackRock and State Street), and were often explained by fear-based arguments such as indexing was Marxist or Socialist or even dangerous to the… Read More

Sears’ Troubles Make Indexing More Attractive

It’s harder than ever for stock investors to beat an index fund because of what has become a “Winner Take All” economy in which relatively few large players are dominating the market–and such companies are increasingly hard to find. This according to a recent article in MarketWatch. Over the past year alone, the article reports, the number of publicly traded U.S. corporations has dwindled by more than 100 to a total of less than 3,500.… Read More

Jack Bogle Talks Indexing

A recent Barron’s profile of Vanguard founder and indexing pioneer Jack Bogle offers an overview of the industry legend’s career as well as the contributions—and controversy—surrounding his market views. The article includes an interview with Bogle in which the octogenarian addresses critic’s concerns about indexing, the “Age of the ETF” and the need for lower cost investing going forward. Here are some interview highlights: While some in the industry feel that index investors are not… Read More

Small College Endowment Outperforms Harvard by Indexing

Bill Abt, who oversees the $120 million endowment of Carthage College in Kenosha, Wisconsin, “has returns that beat Harvard’s $37 billion endowment and most others,” according to a recent article in Bloomberg. “In the 10 years through the most recent college fiscal year, ended on June 30, 2017,” the article reports, “the former beer company executive racked up a 6.2 percent average annual return, according to the school.” Based on data from the National Association of… Read More

The Danger of Index Funds Heavily Weighted in Tech

Index investors now own more tech stocks than they may realize, according to a recent article in The Wall Street Journal. The weighting of technology stocks in the S&P 500 index, the article reports, has “climbed to 23.8% as of December 26, from 20.8% at the end of last year, according to S&P Dow Jones Indices,” and is up from 19.7% three years ago. The article says that investors are now faced with the quandary… Read More

Study Finds that Stock Picking Probably Won’t Make Investors Rich

While some stock pickers can successful, investors should keep in mind that the odds are against them, according to a recent article inThe New York Times. “It’s not just that bull markets like this one eventually come to an end,” the article says, “It’s that over the long run, while the total stock market has prospered, most individual stocks have not.” It offers findings from finance professor Hendrik Bessembinder (of Arizona State University) showing that,… Read More

Jack Bogle on Indexing: “Math is Math”

Back in 1976 when John “Jack” Bogle started the first index fund, his goal was to “capture the overall market’s return at much lower costs than the stock picking fund managers who so often failed to match it,” writes Bloomberg’s Michael Regan in a recent interview with the octogenarian and retired head of Vanguard. The lengthy conversation covers a wealth of topics including these highlights regarding index investing: While Bogle acknowledges that there are plenty of… Read More

Active Managers Face Tough Climb, But Some Worry About Growth of Index Funds

Financial Times reports on the challenges facing active managers, as well as the underperformance. The article notes that “in the first quarter of 2016 most failed to beat whatever market they are professionally judged against, and the proportion to prevail was the smallest since 1998,” based on Morningstar data. Further, and HFR release showed that “the average hedge fund has lost almost as much of its clients’ money [in the first quarter] as it did… Read More