Vanguard fund

The Gone Fishin' Portfolio: Get Wise, Get Wealthy...and Get on With Your Life
by Alexander Green
Published 15 Sep 2008

There is no tax-free substitution for inflation-adjusted Treasuries, either. So plunk the Vanguard High-Yield Corporate Fund (VWEHX), Vanguard REIT Index Fund (VGSIX), and Vanguard Inflation-Protected Securities Fund (VIPSX) in your retirement accounts. Our remaining funds—Vanguard Total Stock Market Index Fund (VTSMX), Vanguard Precious Metals and Mining Fund (VGPMX), Vanguard Emerging Markets Index Fund (VEIEX), Vanguard European Index Fund (VEURX), and Vanguard Pacific Index Fund (VPACX)—are pretty darn tax efficient. These are fine for your taxable accounts. However, the Vanguard Precious Metals Fund (VGPMX) is not an index fund and may make occasional capital gains distributions.

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That means you started with the following:• 15% in U.S. large-cap stocks ($15,000 in the Vanguard Total Stock Market Index) • 15% in U.S. small-cap stocks ($15,000 in the Vanguard Small-Cap Index) • 10% in European stocks ($10,000 in the Vanguard European Stock Index Fund) • 10% in Pacific Rim stocks ($10,000 in the Vanguard Pacific Stock Index Fund) • 10% in emerging markets ($10,000 in the Vanguard Emerging Markets Index Fund) • 10% in high-grade bonds ($10,000 in the Vanguard Short-Term Corporate Bond Fund) • 10% in high-yield bonds ($10,000 in the Vanguard High-Yield Corporate Bond Fund) • 10% in inflation-adjusted Treasuries ($10,000 in the Vanguard Inflation-Protected Securities Fund) • 5% in gold shares ($5,000 in the Vanguard Precious Metals and Mining Fund) • 5% in REITs ($5,000 in the Vanguard Real Estate Investment Trust Index Fund) At the end of the year, the total value of your portfolio will have changed, and so will the percentage you hold in each fund.

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(money manager performance research) Social pressure, impact Social Security income source maintenance problems SPDR DJ Wilshire Total Market ETF Spending, tracking Standard & Poor’s(S&P) decline outperformance performance portfolio, comparison Stein, Ben Stock market fluctuation growth, hypothesis increase investing performance volatility Stocks investment returns, superiority volatility Stocks for the Long Run (Siegel) Style drift Sunk-cost fallacy Swenson, David (investment research) Take On the Street (Levitt) Taxes liabilities payment reduction Taxes in the Mutual Fund Industry (Lipper study) Tax-managed portfolio, impact Templeton, John advice Templeton Growth Fund Total nominal return indices Total returns, average Treasuries, taxable income Treasury bills, returns Treasury Inflation-Protected Securities (TIPS) tax inefficiency Trust fund Uncertainty, elimination U.S. large-cap stocks U.S. multinational firms, international exposure U.S. small-cap stocks U.S. stocks allocation short-term corporate bonds, relationship Value Line Fund, market lag Vanguard Emerging Markets ETF description holdings Vanguard Emerging Markets Stock Index Fund description expenses holdings investment policy management minimums risk attributes Vanguard European ETF description holdings Vanguard European Stock Index Fund description expenses holdings investment policy management minimums risk attributes Vanguard funds Vanguard Gold and Precious Metals Fund, closure reasons Vanguard Group costs, reduction expense ratio fees funds ownership mutual funds, usage no-load characteristic Vanguard High-Yield Corporate Fund description expenses holdings investment policy management minimums risk attributes Vanguard Inflation-Protected Securities Fund description expenses holdings investment policy management minimums Vanguard Inflation-Protected Securities Fund, investment Vanguard Intermediate-term Tax-Exempt Investor Shares, investment Vanguard Pacific ETF description holdings Vanguard Pacific Stock Index Fund description expenses holdings investment policy management minimums risk attributes Vanguard Precious Metals and Mining Fund description expenses holdings investment policy management minimums risk attributes Vanguard REIT ETF description holdings Vanguard REIT Index Fund description expenses holdings investment policy management minimums risk attributes Vanguard Short-Term Corporate Bond Fund, purchase (avoidance) Vanguard Short-Term Investment Grade Fund description expenses holdings investment policy management minimums risk attributes Vanguard Small-Cap ETF description holdings Vanguard Small-Cap Index Fund description expenses holdings investment policy management minimums risk attributes Vanguard Total Bond Market ETF description holdings Vanguard Total Stock Market ETF description holdings Vanguard Total Stock Market Index Fund description expenses growth holdings investment policy management minimums performance redeeming risk attributes Volatility, elimination Wealth, accumulation Wealth Without Risk (Givens) Wellington Management Company What Wall Street Doesn’t Want You to Know (Swedroe) Yale Endowment, investment system 1 “Vanguard” is a trademark of The Vanguard Group, Inc. © 2008 The Vanguard Group, Inc.

The Permanent Portfolio
by Craig Rowland and J. M. Lawson
Published 27 Aug 2012

Treasury bonds: long-term short-term Vanguard: sample portfolios with Vanguard Admiral Treasury Money Market Fund Vanguard Australian Shares Index Vanguard Cash Plus Index Vanguard Diversified Bond Index Vanguard European Bond Index Vanguard FTSE ex-U.S. Index ETF Vanguard FTSE ex-U.S. Index Mutual Fund Vanguard High-Yield Corporate Bond Fund Vanguard Long-Term Corporate Bond Fund Vanguard Long-Term Investment Grade fund Vanguard Long-Term Tax Exempt Bond Fund Vanguard Long-Term Treasury Bond Fund Vanguard MSCI Canada Index ETF Vanguard MSCI Europe Index Vanguard Prime Money Market Fund Vanguard Short Term Treasury Fund Vanguard S&P 500 Index Mutual Fund Vanguard Tax-Free Municipal Money Market Fund Vanguard Total Bond Market fund Vanguard Total International Index Mutual Fund Vanguard Total Stock Market ETF Vanguard Total Stock Market Index Fund Vanguard Total Stock Market Mutual Fund Vanguard Total World Index ETF Vanguard Total World Index Mutual Fund Vanguard Treasury Inflation Protected Securities fund Vanguard Treasury Long Term Mutual Fund Vanguard Treasury Money Market website of Variable investments: definition of funding of reasons for rules related to speculation with Variable Portfolio funds success rate with VIA MAT Volatility.

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Index Mutual Fund Vanguard High-Yield Corporate Bond Fund Vanguard Long-Term Corporate Bond Fund Vanguard Long-Term Investment Grade fund Vanguard Long-Term Tax Exempt Bond Fund Vanguard Long-Term Treasury Bond Fund Vanguard MSCI Canada Index ETF Vanguard MSCI Europe Index Vanguard Prime Money Market Fund Vanguard Short Term Treasury Fund Vanguard S&P 500 Index Mutual Fund Vanguard Tax-Free Municipal Money Market Fund Vanguard Total Bond Market fund Vanguard Total International Index Mutual Fund Vanguard Total Stock Market ETF Vanguard Total Stock Market Index Fund Vanguard Total Stock Market Mutual Fund Vanguard Total World Index ETF Vanguard Total World Index Mutual Fund Vanguard Treasury Inflation Protected Securities fund Vanguard Treasury Long Term Mutual Fund Vanguard Treasury Money Market website of Variable investments: definition of funding of reasons for rules related to speculation with Variable Portfolio funds success rate with VIA MAT Volatility.

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Treasury Money Market implementation of investments using Vanguard Admiral Treasury Money Market Fund Vanguard Prime Money Market Fund Vanguard Tax-Free Municipal Money Market Fund Vanguard Treasury Money Market Morningstar Mortgage bonds Municipal bonds Mutual funds: Fidelity Spartan 500 Index Mutual Fund Fidelity Spartan International Index Mutual Fund Fidelity Spartan Treasury Long-Term Bond Fund implementation of investments using iShares Short Treasury Bond Fund Schwab S&P 500 Index Mutual Fund trading costs associated with Vanguard FTSE ex-U.S. Index Mutual Fund Vanguard S&P 500 Index Mutual Fund Vanguard Total International Index Mutual Fund Vanguard Total Stock Market Mutual Fund Vanguard Total World Index Mutual Fund Vanguard Treasury Long Term Mutual Fund Nabielsky, Jose Natural disasters Natural resources New Zealand Mint Nixon administration Norstad, John O'Kane, Mike Oppenheimer Core Bond fund Passive investing: bond funds as Permanent Portfolio based on stock index funds as tax considerations with Pensions.

The Power of Passive Investing: More Wealth With Less Work
by Richard A. Ferri
Published 4 Nov 2010

Treasury bonds Value investing Value stocks van Dijk, Mathijs A. Vanguard 500 Index Fund: 15-year tax cost ratio for 25-year study on active funds and domestic equity funds of launch of proven record of sales load, lack of Vanguard Bond Market Fund Vanguard First Index Investment Trust Vanguard Group: first index fund, launch of as global investment managers indexing, growth of international indexing analysis web site for Vanguard REIT Index Fund Vanguard S&P 500 index fund Vanguard Small Cap Index Fund Vanguard Total Bond Market Index ETF Vanguard Total Bond Market Index Fund Vanguard Total International Stock Fund Vanguard Total Stock Market Index Fund Vanguard U.S.

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Table 6.7 Model Index Fund Portfolio Used in the Live Study Index Fund Name Percent Allocation Vanguard Total Stock Market Index Fund 45% Vanguard Total International Stock Index Fund* 15% Vanguard Total Bond Market Index Fund 40% * The Vanguard Total International Fund had its first full year under management in 1998. The FTSE All-World ex-US Index Fund (less 0.4 percent fee) is substituted for the years 1995 through 1997. The allocation of the FTSE ex-US could have been replicated using three other Vanguard international index funds that were in existence over the entire time period. The difference between the simulated fund and the actual funds was negligible.

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The shackles were off as John Bogle and his small crew at Vanguard set a new course to sail into unchartered waters. Vanguard 500 Index Fund’s Proven Record In 1976, the passive versus active debate moved from academia to Main Street as the battle for the hearts and minds of investors’ began. Who’s been winning the battle? Let’s start by looking at the performance of Vanguard’s first index fund over the past 25 years. There were about 260 actively managed domestic equity funds available to investors at the time the Vanguard 500 Index Fund launched in late 1976, according to Lipper, a financial markets research and wholly owned subsidiary of Reuters Group PLC.

The Clash of the Cultures
by John C. Bogle
Published 30 Jun 2012

See also Index funds assets exchange traded funds versus future of growth in number of as portfolio core profile of trading volumes “Trafficking” in management contracts Transactions: cost of taxes on Trends Turner, Adair Turner, Lynn Turnover: actively managed equity funds exchange traded funds index funds mutual funds Stewardship Quotient and stock market Twardowski, Jan M. 12b-1 fees Value, corporate Vanguard: Admiral shares balanced index fund bond funds, defined-maturity cash flow emerging markets stock fund exchange traded funds “Extended Market” portfolio growth and value index funds history index fund family milestones international funds LifeStrategy Portfolios proxy votes REIT index fund small capitalization stock fund Stewardship Quotient structure and strategy tax-managed index funds Vanguard 500 Index Fund Vanguard Institutional Index Fund Vanguard PRIMECAP Fund Vanguard Total Bond Market Index Fund Vanguard Total Stock Market Index funds Vanguard U.S.

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Yet again, RTM strikes. Vanguard U.S. Growth Fund (1960–2012) Cumulative Return vs. S&P 500 Vanguard U.S. Growth Fund began in 1958 as Ivest Fund. . . . Wellington Management acquires its manager in 1966. . . . Cumulative return during 1961–1967 best in the entire mutual fund industry; 327 percent versus 108 percent for the S&P 500. . . . Pummeled in the 1973–1974 crash: −55 percent versus −35 percent for the S&P 500. Pedestrian recovery. . . . Cumulative return 1960–1976: Fund 238 percent; S&P 218 percent. RTM strikes again. . . . Name changed to Vanguard Growth Fund in 1980, then became a separate U.S.

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Since fiduciary duty may be difficult for investors to measure intuitively, Chapter 5 is designed to help mutual fund investors measure their own fund managers, evaluating them on 15 different points of judgment. This chapter will likely prove contentious, for I set down my own evaluations—flawed and subjective though they may be—of what I call the “Stewardship Quotient” for Vanguard and for three other fund managers. The Index Fund In 1975, I created the first index mutual fund, now known as Vanguard 500 Index Fund. Then, as now, I considered it the very paradigm of long-term investing, a fully diversified portfolio of U.S. stocks operated at high tax efficiency and rock-bottom costs, and designed to be held, well, “forever.” It is now the world’s largest equity mutual fund.

Unconventional Success: A Fundamental Approach to Personal Investment
by David F. Swensen
Published 8 Aug 2005

Table 7.4 Most Mutual-Fund Assets Reside in Taxable Accounts Source: Investment Company Institute. Table 7.5 After-TaxMutual-Fund Returns Disappoint Performance Relative to the Vanguard 500 Index Fund Source: Arnott et al., Journal of Portfolio Management 26, no. 4 (2000). Notes: These returns do not reflect survivorship bias. Data reflect periods ending December 31, 1998. To add insult to injury, the Vanguard 500 Index Fund results emanate from a portfolio that lays no claim to tax-sensitive investing. While the generally low turnover of the Vanguard 500 Index Fund portfolio leads to reasonably attractive tax characteristics, paying attention to tax issues could further improve the after-tax results.

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The overwhelmingly likely explanation for this dichotomy suggests that benefits of scale accrue largely to fund-management-company profits with nothing left over for improving shareholder returns. Vanguard and GMO represent the exception; Principal and Bernstein, the rule. Table 8.8 Vanguard U.S. Value Fund Investors Receive a Fair Deal (Percent) Source: The Vanguard Group, Vanguard U.S. Value Fund Prospectus, 29 January 2004: 2, 7. Notes: Figures represent charges for the year ending September 30, 2003. As of September 30, 2003, the Vanguard U.S. Value Fund had approximately $474 million in net assets. Charges for asset levels in excess of $1 billion represent estimates. Management fees represent base fees, ignoring incentive fees that increase or decrease GMO’s compensation by as much as 0.125 percent.

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Percentages represent distributions relative to the average net assets for the relevant year. Fixed-membership index funds, such as the Vanguard 500 Index Fund, tend to demonstrate superior tax characteristics, since managers make relatively few trades to keep current with the relatively static index composition. During the ten years ending December 31, 2003, long-term gains distributions for the flagship Vanguard index fund averaged 0.6 percent of assets, ranging from 0.0 percent to 1.7 percent on an annual basis. Tax bills for long-term capital gains did little to diminish the returns of Vanguard’s index-fund investors. Actively managed mutual funds generally place a greater tax burden on their shareholder base.

The Bogleheads' Guide to Investing
by Taylor Larimore , Michael Leboeuf and Mel Lindauer
Published 1 Jan 2006

Let's take a look at the composition of a couple of these funds. The Vanguard LifeStrategy Growth Fund has a fairly aggressive target asset allocation of 80 percent stocks and 20 percent bonds. This fund of funds invests in four Vanguard funds: 1. Total Stock Market Index Fund 2. Total International Stock Index Fund 3. Asset Allocation Fund 4. Total Bond Market Fund The Vanguard LifeStrategy Conservative Growth Fund has a more conservative target asset allocation of 40 percent stocks and 60 percent bonds. This fund of funds invests in five Vanguard funds: 1. Total Stock Market Index Fund 2. Total International Stock Index Fund 3.

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While all three of us believe that indexing is an excellent investment strategy, all three of us own actively managed Vanguard funds, too. Although Vanguard is known as the pioneer of index funds, it also offers a wide variety of actively managed funds, with some having delivered great returns. For example, for the first 20 years of its existence (1984 to 2004), Vanguard's Health Care Fund had the highest annual average return of any mutual fund in the world. And in the past 25 years, a portfolio of Vanguard's actively managed funds outperformed the Wilshire 5000 (the total U.S. stock market index) by an average of 0.9 percent per year.

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We know that by simply changing our allocation between stocks and bonds, we can lessen the amount of volatility in our portfolio until we reach our comfortable sleep level. Table 8.2 shows the maximum decline that would have occurred during the 2000 to 2002 three-year bear market using various combinations of two Vanguard funds-Vanguard's Total Stock Market Index Fund and Vanguard's Total Bond Market Index Fund, with annual rebalancing. It illustrates why nearly every portfolio should contain an allocation to bonds. If you were invested in stocks during the 2000 to 2002 three-year bear market, you undoubtedly have a good idea of your risk tolerance. If you sold losing funds, or if you lost sleep, your portfolio should almost certainly have held more bonds.

The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life
by J L Collins
Published 17 Jun 2016

The Three Tools Once you’ve sorted through your three considerations, you are ready to build your portfolio and you’ll need only these three tools to do it. See, I promised this would be simple! 1. Stocks: VTSAX (Vanguard Total Stock Market Index Fund). Stocks provide the best returns over time and serve as our inflation hedge. This is our core wealth-building tool. (See Chapter 17 for variants of this same fund.) 2. Bonds: VBTLX (Vanguard Total Bond Market Index Fund). Bonds provide income, tend to smooth out the rough ride of stocks and serve as our deflation hedge. 3. Cash. Cash is good to have around to cover routine expenses and to meet emergencies.

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As you get older you might want to smooth the ride a bit, even at the cost of lower overall returns. You want to sleep at night. Now that I’m kinda, sorta retired and we are financially independent, me too. My wife and I hold some other stuff in our portfolio. But not much. Here it is: ~75% Stocks: VTSAX (Vanguard Total Stock Market Index Fund). Still our core holding for all the reasons we’ve discussed. ~20% Bonds: VBTLX (Vanguard Total Bond Market Index Fund). Bonds provide some income, tend to smooth out the rough ride of stocks and are a deflation hedge. ~5% Cash: We hold ours in our local bank. You can fine-tune these allocations to your own personal considerations.

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Reading this book so far you already know this. You also know that, with simplicity as our guide, we look at our investing lives in two broad stages using just two funds: The Wealth Accumulation Stage and the Wealth Preservation Stage. Or, perhaps, a blend of the two. VTSAX (Vanguard Total Stock Market Index Fund) and VBTLX (Vanguard Total Bond Market Index Fund). The wealth accumulation stage is when you are working and have earned income to save and invest. For this stage I favor 100% stocks and VTSAX is the fund I prefer. If financial independence is your goal, your savings rate in these years should be high.

The Four Pillars of Investing: Lessons for Building a Winning Portfolio
by William J. Bernstein
Published 26 Apr 2002

Steel, 147, 160 USA Today, 219, 220 Value averaging, 283–285 Value Line, 90 Value Line Fund, 90 Value stocks (“bad” companies) asset allocation, 120-122, 172, 248–255, 251–253 Graham on, 158 in portfolio building, 109, 120–122, 172 In Search of Excellence (Peters) on, 64 real returns on, 68, 69, 72 rebalancing, 289–290 returns on, 34-38 tax efficiency of, 263–264 Vanguard 500 Index Fund, 97, 98, 102–104, 215, 216 Vanguard GNMA Fund, 215-216 Vanguard Growth Index Fund, 249 Vanguard Limited Term Tax Exempt Fund, 261 Vanguard mutual funds fee structure, 210, 250, foreign indexed funds, 119 founding by Bogle, 213-214 as no-load company, 205 Vanguard Short-Term Corporate Fund, 261 Vanguard Small-Cap Index Fund, 99 Vanguard Tax-Managed Small-Cap Index Fund, 99 Vanguard Total International Fund, 255, 256 Vanguard Total Stock Market Fund, 104, 246 Vanguard Value Index Fund, 249-250 Variable annuity fund, 204 Variety, 145 Venetian prestiti, 10–13 Vertin, James, 96–97 Victoria, Queen of England, 143 Von Böhm-Bawerk, Eugen, 8 Wal-Mart, 34–35, 185 The Wall Street Journal, 85, 96, 98, 167, 211, 219, 222, 225 Wall Street Week (television program), 224 Walz, Daniel T., 231 Wellington Management Company, 213–214 Wells Fargo, first index fund, 96–97, 215, 245 Westinghouse, 133 Wheeler, Dan, 123 Where are the Customers’ Yachts?

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This will initially result in 0.2% extra expense—not a bad price to pay for the diversification obtained. I’d recommend adding in asset classes/funds in the following order: 1. $0–$5,000 added: Start with Vanguard 500 Index Fund. 2. $5,000–$10,000 total contributions: Add Vanguard Total International Fund. 3. $10,000–$15,000 total contributions: Add Vanguard REIT Index Fund. 4. $15,000–$20,000 total contributions: Add Vanguard Small-Cap Value Fund. Note that we are not adding $5,000 to each fund in sequence. For example, Yvonne’s asset allocation calls for a total of 13.2% foreign equity (the sum of the four international funds) and 6% REITs.

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A few years later, in September 1976, John Bogle’s young Vanguard Group offered the first publicly available S&P 500 Index fund. Vanguard’s fund was not exactly a roaring success out of the starting gate. After two years, it had collected only $14 million in assets. In fact, it did not cross the billion-dollar mark—the radar threshold of the fund industry—until 1988. But as the advantages of indexing became evident to small investors, it took off. For the past few years, it has been running neck-and-neck for the number one spot in asset size with Lynch’s old fund, Magellan. Truth be told, the Vanguard 500 Index Fund has gotten a little too popular. Of all the major stock indexes, the S&P 500 has done the best in recent years.

All About Asset Allocation, Second Edition
by Richard Ferri
Published 11 Jul 2010

Stock Market ETF (VTI) Vanguard Total International Portfolio (VGTSX) or Vanguard FTSE All World ex-U.S. ETF (VEU) Vanguard REIT Index Fund (VGSIX) or Vanguard REIT ETF (VNQ) Vanguard Total Bond Market Index Fund (VBMFX) or Vanguard Total Bond Market ETF (BND) Building Your Portfolio TA B L E 251 12-2 Early Savers—Moderate Multi-Asset-Class Portfolio (open-end mutual funds or ETF version) Asset Class Percent Sample Low-Cost Funds and Symbols U.S. Equity Core equity 25% Vanguard Total U.S. Stock Market Index (VTSMX) or Vanguard Total U.S. Stock Market ETF (VTI) Small value 10% Vanguard Small-Cap Value Index Fund (VISVX) or iShares S&P 600 Barra Value (IJS) 5% Bridgeway Ultra Small Company Market (BRSIX) or iShares Russell Microcap Index ETF (IWC) 10% Vanguard REIT Index Fund (VGSIX) or Vanguard REIT ETF (VNQ) Microcap Real estate International Equity Pacific Rim—large 5% Vanguard Pacific Stock Index (VPACX) or Vanguard Pacific Stock ETF (VLP) Europe—large 5% Vanguard European Stock Index (VEURX) or Vanguard European Stock ETF (VGK) International smallcap value 5% DFA International Small Cap Value* (DISVX) or WisdomTree International Small Cap Dividend (DLS) Emerging markets 5% DFA Emerging Markets* (DFEMX) or Vanguard Emerging Markets Stock ETF (VWO) Fixed Income Investment-grade bonds 20% Vanguard Total Bond Market Index Fund (VBMFX) or Vanguard Total Bond Market ETF (BND) High-yield bonds 5% Vanguard High Yield Bond Fund (VWEHX) or iShares iBoxx High Yield Corporate Bond (HYG) Inflation-protected bonds 5% Vanguard Inflation-Protected Securities (VIPSX) or iShares Barclays TIPS Bond Fund (TIP) *DFA funds are available only through select investment advisors.

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Stock Market ETF (VTI) Vanguard Total International Portfolio (VGTSX) or Vanguard FTSE All World ex-US ETF (VEU) Vanguard REIT Index Fund (VGSIX) or Vanguard REIT ETF (VNQ) Vanguard Total Bond Market Index Fund (VBMFX) or Vanguard Total Bond Market ETF (BND) CHAPTER 12 256 TA B L E 12-4 Midlife Accumulators—Moderate Multi-Asset-Class Portfolio (open-end mutual funds or ETFs) Asset Class Percent U.S. Equity Core U.S. equity 20% Small value 10% Sample Low-Cost Funds and Symbols Vanguard Total U.S. Stock Market Index (VTSMX) or Vanguard Total U.S. Stock Market ETF (VTI) Vanguard Small-Cap Value Index Fund (VISVX) or iShares S&P 600 Barra Value (IJS) Bridgeway Ultra Small Company Market (BRSIX) or iShares Russell Microcap Index ETF (IWC) Microcap 5% Real estate 8% Vanguard REIT Index Fund (VGSIX) or Vanguard REIT ETF (VNQ) International Equity Pacific Rim—large 4% Europe—large 4% International small-cap value 5% Emerging markets 4% Vanguard Pacific Stock Index (VPACX) or Vanguard Pacific Stock ETF (VLP) Vanguard European Stock Index (VEURX) or Vanguard European Stock ETF (VGK) DFA International Small Cap Value* (DISVX) or WisdomTree International Small Cap Dividend (DLS) DFA Emerging Markets Core* (DFEMX) or Vanguard Emerging Markets ETF Fixed Income Investment-grade bonds 20% High-yield bonds 10% Inflation-protected bonds 10% Vanguard Total Bond Market Index Fund (VBMFX) or Vanguard Total Bond Market ETF (BND) Vanguard High Yield Bond Fund (VWEHX) or iShares iBoxx High Yield Corporate Bond (HYG) Vanguard Inflation-Protected Securities (VIPSX) or iShares Barclays TIPS Bond Fund (TIP) *DFA funds are available only through select investment advisors.

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Equity Core U.S. equity Percent 20% Small value 5% Real estate 5% International Equity Pacific Rim—large 4% Europe—large 4% Emerging markets 2% Fixed Income Investment-grade bonds Short-term bonds 30% 18% Inflation-protected bonds 10% Cash Cash equivalent 2% Sample Low-Cost Funds and Symbols Vanguard Total U.S. Stock Market Index (VTSMX) or Vanguard Total U.S. Stock Market ETF (VTI) Vanguard Small-Cap Value Index Fund (VISVX) or iShares S&P 600 Barra Value (IJS) Vanguard REIT Index Fund (VGSIX) or Vanguard REIT ETF (VNQ) Vanguard Pacific Stock Index (VPACX) or Vanguard Pacific Stock ETF (VLP) Vanguard European Stock Index (VEURX) or Vanguard European Stock ETF (VGK) DFA Emerging Markets* (DFEMX) or Vanguard Emerging Markets Stock ETF (VWO) Vanguard Total Bond Market Index Fund (VBMFX) or Vanguard Total Bond Market ETF (BND) Vanguard Investment Grade Short-term (VFSTX) or Vanguard Short-Term Bond ETF (BSV) Vanguard Inflation-Protected Securities (VIPSX) or iShares Barclays TIPS Bond Fund (TIP) Low-cost money market fund with checking *DFA funds are only available through select financial advisors.

The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk
by William J. Bernstein
Published 12 Oct 2000

I suspect that Vanguard will be coming out with a tax-managed largecap value strategy sooner or later, but they’re not there yet. 5. Vanguard Small-Cap Index Fund. This fund tracks the Russell 2000 Index. It is suitable only for tax-sheltered accounts. 6. Vanguard Tax-Managed Small-Cap Fund. For taxable accounts, this fund uses the tax-managed strategy described above. This fund has a $10,000 minimum and the same 1% or 2% redemption fee as the TaxManaged Growth and Income Fund. It also carries a .5% purchase fee, payable to the fund itself to mitigate the spread and impact costs in this area. 7. Vanguard Small-Cap Value Index Fund. This fund is suitable for tax-sheltered accounts only because it is likely to have high turnover and distributions.

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Moreover, as we saw in Chapter 6, the expense ratio is just the beginning, with commissions, spreads, and impact costs further lowering your returns. Of course, Vanguard also incurs these costs, but because of low index fund turnover, these expenses are much less than that of conventional actively managed funds. Here are the Vanguard stock funds I’d recommend: 1. Vanguard 500 Index Fund. The granddaddy of all index funds, which tracks the S&P 500. Sometime in the next year, it will almost certainly become the planet’s largest mutual fund. A fine choice for the long haul, particularly in tax-sheltered accounts, it does have some modest drawbacks for the taxable investor.

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A fine choice for the long haul, particularly in tax-sheltered accounts, it does have some modest drawbacks for the taxable investor. Standard & Poor’s periodically adds and deletes stocks from the index, incurring distributions as the fund rearranges its portfolio accordingly. Because of this, I’d recommend two alternatives for the taxable investor—the Vanguard Total Stock Market Index Fund and the Vanguard TaxManaged Growth and Income Funds. 2. Vanguard Tax-Managed Growth and Income Fund. This taxmanaged version of the 500 Index Fund seeks to minimize distributions by selling high-basis-cost shares first and selling other positions at a loss to offset gain sales. Note should be made of the Implementing Your Asset Allocation Strategy 147 fund’s higher minimum ($10,000 versus the usual $3000) as well as a 2% redemption fee for shares held less than one year and a 1% fee for shares held less than five years. 3.

Retire Before Mom and Dad
by Rob Berger
Published 10 Aug 2019

Bonds (20%) Foreign Developed Country Stocks (20%) Emerging Market Stocks (10%) REITs (10%) Here are the specific funds I used to create my 6-Fund Portfolio: Vanguard 500 Index Fund Admiral Shares (FVIAX) Vanguard Emerging Markets Stock Index Fund Admiral Shares (VEMAX) Vanguard Developed Markets Index Fund Admiral Shares (VTMGX) Vanguard Intermediate-Term Bond Index Fund Admiral Shares (VBILX) Vanguard Real Estate Index Fund Admiral Shares (VGSLX) Vanguard Small Cap Value Index Fund Admiral Shares (VSIAX) This approach does take more work. Remember, as market values change, you need to rebalance your portfolio from time to time.

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At first it may not seem like we are well diversified. How diversified can you be in a single mutual fund? Very. Vanguard takes your money and divides it into four different Vanguard mutual funds for you. Here they are: Vanguard Total Stock Market Index Fund Investor Shares (54.6%) Vanguard Total International Stock Index Fund Investor Shares (35.4%) Vanguard Total Bond Market II Index Fund Investor Shares (7.00%) Vanguard Total International Bond Index Fund Investor Shares (3.00%) Even with four funds, you may be questioning just how diversified this portfolio really is. One thing to always keep in mind is that the number of mutual funds, by itself, tells you nothing about how well diversified a portfolio is.

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One option would be to follow what Vanguard does in its TDR funds. You’d find the fund that corresponds to when you plan to retire and mimic the same allocation. For example, the Vanguard 2040 TDR fund invests 51% in U.S. Stocks, 34% in Foreign Stocks, and the rest in bonds. You can find information on Vanguard’s TDR funds here: https://www.retirebeforemomanddad.com/Vanguard_TDR. In my opinion, an 80/20 portfolio is ideal for long-term investors (those who don’t need the money for at least 10 years). As such, I believe the following portfolio of Vanguard funds is an excellent 3-Fund Portfolio: 50%: Vanguard Total Stock Market Index Fund (VTSAX) 30%: Vanguard Total International Stock Index Fund (VTIAX) 20%: Vanguard Total Bond Index Fund (VBTLX) You’ll find examples of the 3-Fund Portfolio using index funds from the major mutual fund companies on the Bogleheads’ website: https://www.retirebeforemomanddad.com/3-fund-portfolio.

Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever
by Robin Wigglesworth
Published 11 Oct 2021

Rowe Price, 127, 234, 244 Trump, Donald, 246 Tsai, Gerald, 34 Tufts University, 47, 48 Tull, Robert, 195–96, 247 Turner, Grant, 260 Turner, Judith, 58 Twardowski, Jan, xi, 97, 101, 104, 127 at Russell Investments, 142 setting up Vanguard FIIT (“Bogle’s Folly”), 108–9, 110–14 Unilever, 255–56 Union League Club, 97, 99, 100–101 Union Warren Savings Bank, 128 United Airlines, 230 United States Oil Fund (USO), 248 Universities Superannuation Scheme (USS), 274–76 University of Besançon, 23 University of British Columbia, 186 University of California, Berkeley, 42, 58, 137, 138, 161, 187 University of California, Los Angeles (UCLA), 42, 43, 169, 206–7, 234–35 University of Chicago, 52–53, 75 Booth at, 50, 140–41 Booth gift to, 157–58 Fama at, 47–50, 63, 140 Grauer at, 186–87 Lorie and CRSP, 30–33, 35–36, 52–53 Markowitz at, 38–41 Miller at, 48–49, 63, 138, 140, 147 Sauter at, 123 Sinquefield at, 35, 63, 64, 140 University of Dijon, 23 University of Kansas, 139 University of Kentucky, 72 University of Leuven, 47 University of Pennsylvania, 153 value investing, 7, 152, 154 value stocks, 154–56 VanEck Vectors Gold Miners ETF, 242, 242n VanEck Vectors Junior Gold Miners ETF, 262–63 Vanguard billion-dollar milestones of, 119–20, 121 Bogle-Brennan schism, 130–34 DFA and, 146 ETFs, 166–68, 200–201, 256 fee structure, 116–17, 120–21, 123 founding of, 11–12, 104–10, 104n “Giant Three” scenario, 297–99 growth of, 119–20, 121–22 gun stock boycott, 285–87 Malvern headquarters of, 125–26 rise of, 119–35 Vanguard, HMS, 104, 126 Vanguard Adviser, 121 Vanguard Extended Market Index Fund, 124 Vanguard First Index Investment Trust (FIIT), 107–17, 121–22 loads, 115–17 name change of, 121–22 selling, 114–15 setting up, 107–14 Vanguard 500 Index Fund, 15, 122–25, 133–34, 181 Vanguard Index Trust, 122 Vanguard Total Bond Market Index Fund, 261 Vanguard Total Stock Market Index Fund, 123–25 Varley, John, 205 Vasi, Alonso Segura, 257 Velocity Shares Daily Inverse VIX Short Term ETN, 247–48 Vertin, James “Jim,” xi at Wells Fargo, 62, 69–72, 73–74, 81, 187 retirement, 184 Vestager, Margrethe, 296 Vietnam War, 63, 139–40, 161 Visa, 256 volatility, 40, 74, 151, 152–53 volatility index, 247–48 Volcker, Paul, 17–18, 119, 185 Volkswagen, 236 von Neumann, John, 43 Wachter, Paul, 160 Wagner, Susan, 204, 210, 212, 224 Wagner, Wayne, 71, 76 Wallace, David Foster, 265–66 Wall Street Crash of 1929, 27, 88, 89, 92, 225–26 Wall Street Journal, 27, 29, 33, 82, 83, 84, 122, 137, 152, 160, 180, 252 Walmart, 198 Wang, Zexi, 254 Warwick Municipal Bond Fund, 117–18 Washington Post, 4, 7, 8, 17 Wasserstein, Bruce, 210 Weber, Clifford, 176–77, 182 Wellington, Arthur Wellesley, Duke of, 92, 103 Wellington Management Company, 53, 88, 92–104, 115, 127, 130 Wells Fargo, 106, 152–53, 188 Amex and Most, 175 McQuown’s hiring, 57–59 Netzly at, 236–37 origin story of index investing, 69–77, 164–65 WFIA’s relationship with, 185–88 Wells Fargo Investment Advisors (WFIA), 76–77, 79–81, 122, 184–86 Dunn at, 185–86, 193–95 Grauer at, 188–93 “Tactical Asset Allocation” fund, 189n Wells Fargo’s relationship with, 185–88 Wells Fargo Management Sciences, 69–77 McQuown’s departure, 81–82, 184 McQuown’s hiring, 58–59, 61–62 McQuown-Vertin battles, 69–70 Wells Fargo Nikko Investment Advisors (WFNIA), 190–92 Wells Fargo Stagecoach Fund, 74–75, 81, 141, 143 Wheeler, Dan, xii, 138, 161–64 background of, 161 at DFA, 138, 161, 162–64 Where Are the Customers’ Yachts?

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Just two weeks later, the US stock market suffered its biggest one-day collapse in history, a crash that quickly became known as Black Monday. Yet Sauter proved an inspired, timely hire. At the time of his arrival, Vanguard had only two index funds, the Vanguard 500 and a bond fund started the previous year, which combined still managed just $1.2 billion.12 While Vanguard’s funds were much cheaper than its rivals, thanks to its at-cost structure, word simply spread slowly. The internet was still in its infancy, Vanguard refused to do much marketing, and there were few brokers clamoring to push their funds, given the lack of sales fees.

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“The Sage of Omaha proved what Jack and Bogleheads knew all along, passive investing is the way to go,” chortled one of them. It wasn’t even close. The Vanguard 500 Index Fund—ironically viewed as a dismal failure when launched by Bogle four decades earlier—had returned 125.8 percent over the decade. The quintet of funds-of-hedge-funds had an average return of only 36.3 percent. In fact, not one of the five individual hedge fund investment vehicles had managed to beat the S&P 500 index that the Vanguard fund tracked. In his annual report, Buffett was not above some gloating. “Bear in mind that every one of the 100-plus managers of the underlying hedge funds had a huge financial incentive to do his or her best,” he wrote.

Reset: How to Restart Your Life and Get F.U. Money: The Unconventional Early Retirement Plan for Midlife Careerists Who Want to Be Happy
by David Sawyer
Published 17 Aug 2018

When you retire, switch to the 80% equity fund of the same name. How simple is that! B. A Vanguard two-fund option of FTSE Developed World Ex-UK Equity Index Fund – Accumulation (75%) and FTSE UK All Share Index Unit Trust – Accumulation (25%) Two-fund composite charge: 0.1275% (compared to 0.08% for the recommended RESET portfolio using Fidelity funds and 0.12% using Vanguard funds). MO: Vanguard’s Developed World Ex-UK passive fund tracks 2,030 large and mid-sized companies stocks around the world. The UK element is taken care of with Vanguard’s UK All Share fund. A good, cost-effective two-fund solution, but you do sacrifice the exposure to emerging markets (including China and India) that Vanguard’s one-stop LifeStrategy 100 fund gives you.

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Bogleheads’ three-fund portfolio The Bogleheads are a vibrant, mainly online – but also physical, with 60 chapters worldwide[401] – community of individuals who love passive investing and Jack Bogle. The three funds recommended for US investors are[402]: Vanguard Total Stock Market Index Fund (VTSMX). Vanguard Total International Stock Index Fund (VGTSX). Vanguard Total Bond Market Fund (VBMFX). Opinions differ on the percentage allocation to each. Followers of this approach like its simplicity, low cost, international diversification and (depending on what percentage of your portfolio is in bonds) reduced risk.

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The overall charge for investing with Fidelity, choosing all Fidelity funds is 0.43% (0.35% + 0.08%). The overall charge for investing with Vanguard, choosing all Vanguard funds is 0.27% (0.15% + 0.1225%). Remember. At time of going to press (August 2018), Vanguard doesn’t offer retail investors Sipps, so you can either keep it simple and stick your entire stash in Fidelity or take the slightly more complicated route, and stick your Isa money in Vanguard and your Sipp money in Fidelity. Or, you can invest in all the Vanguard funds within Fidelity. (While you’re using Fidelity as your fund manager, pick the Fidelity funds. Because in every case – see above – they are cheaper than their Vanguard alternatives, and the performance won’t differ much because you’re investing in index trackers.)

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
by John C. Bogle
Published 1 Jan 2007

Don’t Take My Word for It Consider these words from a paper by John B. Shoven, of Stanford University and the National Bureau of Economic Research, and Joel M. Dickson, then of the Federal Reserve System (now a principal at Vanguard): “Mutual funds have failed to manage their realized capital gains in such a way as to permit a substantial deferral of taxes, [raising] investors’ tax bills considerably. . . . If the Vanguard 500 Index Fund could have deferred all of its realized capital gains, it would have ended up in the 91.8th percentile for the high-tax investor” (i.e., outpaced 92 percent of all managed equity funds). * * * Or listen to investment adviser William Bernstein, author of The Four Pillars of Investing: “While it is probably a poor idea to own actively managed mutual funds in general, it is truly a terrible idea to own them in taxable accounts . . .

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The first index fund was created by Vanguard in 1975. It took nine years before the second index fund appeared—Wells Fargo Equity Index Fund, formed in January 1984. Its subsequent return can be compared with that of the original Vanguard 500 Index Fund since then. Both funds selected the S&P 500 Index as their benchmark. The sales commission on the Vanguard Index 500 Fund was eliminated within months of its initial offering, and it now operates with an expense ratio of 0.04 percent (4 basis points) for investors who have $10,000 or more invested in the fund. In contrast, the Wells Fargo fund carried an initial sales charge of 5.5 percent, and its expense ratio averaged 0.80 percent per year (the current expense ratio is 0.45 percent).

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Behind the eight-ball at the start, the fund falls further behind with each passing year. Your index fund should not be your manager’s cash cow. It should be your own cash cow. During the 33 years since 1984, these seemingly small differences added up to a 27 percent enhancement in value for the Vanguard fund. An original investment of $10,000 grew to $294,900 in the Vanguard 500 Index Fund as 2017 began, compared with $232,100 for the Wells Fargo Equity Index Fund. All index funds are not created equal. Intelligent investors will select the lowest-cost index funds that are available from reputable fund organizations. Some years ago, a Wells Fargo representative was asked how the firm could justify such high charges.

Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School
by Andrew Hallam
Published 1 Nov 2011

So an investor with $200,000 could pay a lot less with a Vanguard Australian Life Strategy Fund than he or she would by building a portfolio with separate Vanguard indexes. Table 6.9 reveals the relative costs. Table 6.9 Vanguard Australia’s Life Strategy Fund Options (Quoted in Australian dollars) Source: Vanguard Investments Australia16 Life Strategy Index Funds Allocation Fees Based on Account Size Vanguard Life Strategy Conservative Fund 70% bond indexes and cash 30% Australian and International stock indexes 0.9% on the first $50,000 0.6% on the next $50,000 0.35% on the balance above $100,000 Vanguard Life Strategy Balanced Fund 50% bond indexes and cash 50% Australian and International stock indexes 0.9% on the first $50,000 0.6% on the next $50,000 0.35% on the balance above $100,000 Vanguard Life Strategy Growth Fund 30% bond indexes and cash 70% Australian and International stock indexes 0.9% on the first $50,000 0.6% on the next $50,000 0.35% on the balance above $100,000 Vanguard Life Strategy High Growth Fund 10% bond indexes and cash 90% Australian and International stock indexes 0.9% on the first $50,000 0.6% on the next $50,000 0.35% on the balance above $100,000 The fund you choose will depend on your tolerance for risk.

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If you’re interested in an allocation of bonds that’s close to your age, then you could choose from the following respective funds. 1. Vanguard Life Strategy High Growth Fund: <www.vanguard.com.au/personal_investors/investment/managed-funds-up-to-$500000/diversified/high-growth.cfm> 10 percent bonds, 90 percent stocks. This is well suited for high-risk investors or investors in their late teens or 20s. 2. Vanguard Life Strategy Growth Fund: <www.vanguard.com.au/personal_investors/investment/managed-funds-up-to-$500000/diversified/growth.cfm> 30 percent bonds, 70 percent stocks. This benefits investors in their 30s and 40s. 3. Vanguard Life Strategy Balanced Fund: <www.vanguard.com.au/personal_investors/investment/managed-funds-up-to-$500000/diversified/balanced.cfm> 50 percent bonds, 50 percent stocks.

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And remember, the lower the turnover, the higher the tax efficiency. Table 6.1 Turnover Rate of Respective Funds Source: Morningstar.com3 Balanced / Target Retirement Funds Taxable Turnover (the Lower, the Better) Vanguard Target Retirement 2015 Fund 19% Fidelity Balanced Fund 122% American Funds Balanced Fund 46% T. Rowe Price Balanced Fund 41% An array of Vanguard’s Target Retirement Funds, with their respective bond allocations and portfolio turnover rates is shown in Table 6.2. Remember not to get too concerned by the target date in the name. If you’re a 50-year-old without a pension, it’s wise to select a portfolio (or a fund, in this case) that has a bond allocation somewhat equivalent to your age.

How I Invest My Money: Finance Experts Reveal How They Save, Spend, and Invest
by Brian Portnoy and Joshua Brown
Published 17 Nov 2020

His son’s firm manages about $1.1 billion and its small-cap mutual fund charges annual fees of 1.35%, much higher than the 0.24% annual fee for a Vanguard index fund that tracks similar stocks, but about average for active managers offering similar services. John Bogle has a ready reply: He is making money for clients and for himself. “Is there anything wrong with that?” he said once in response. This year, John Bogle’s fund has generated total returns of 40%... according to Morningstar, compared with 35% for the Russell 2000 and 34% for the similar Vanguard fund, according to Morningstar. Even his father benefits. He is an investor in the small-cap fund.

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We invest money from every paycheck into these index funds—a combination of US and international stocks. There’s no set goal—it’s just whatever is left over after we spend. We max out retirement accounts in the same funds, and contribute to our kids’ 529 college savings plans. And that’s about it. Effectively all of our net worth is a house, a checking account, and some Vanguard index funds. It doesn’t need to be more complicated than that for us. I like it simple. One of my deeply held investing beliefs is that there is little correlation between investment effort and investment results. The reason is because the world is driven by tails—a few variables account for the majority of returns.

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We joke that we are their worst customers ever; we try not to keep much money in those accounts, just what we need to fund cash flows, and we don’t use any services, unless you count getting foreign currency before trips and using their online bill-paying and ATMs. Within my Morningstar 401(k), I have both active and passive funds, but mainly active. My account is primarily equities. I steer a fourth of my contribution into four equity funds: Vanguard Institutional Index, American Funds Washington Mutual (the R6 share class—0.27% expense ratio), Vanguard International Growth, and Dodge & Cox International. I’ve been contributing to those four funds for the past five years or more. Vanguard International Growth is my largest position; I think I’ve held that fund since I joined Morningstar in 1993.

The Oil Factor: Protect Yourself-and Profit-from the Coming Energy Crisis
by Stephen Leeb and Donna Leeb
Published 12 Feb 2004

And this was not in any way a mere theoretical exercise: it is entirely possible to buy and sell “the market” by investing in index funds that include all the stocks in particular market indices. In our comparisons, we assumed you were buying and selling the Vanguard 500 Index Fund, which is a no-load fund that can be purchased through the Vanguard Group. But while index funds are a convenient way to showcase our oil indicator’s performance, they won’t be good investments in the years ahead, and when oil flashes a positive signal, we don’t suggest that you buy “the market.” That’s because, as we explain later, we believe that oil prices have embarked upon a long-term uptrend.

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Appendix List of Recommendations Stocks Apartment Investment and Management (AIV) NYSE Apex Silver (SIL) NYSE Barrick Gold (ABX) NYSE Berkshire Hathaway (Class B—BRK) NYSE Boeing (BA) NYSE CACI International (CAI) NYSE ChevronTexaco (CVX) NYSE Devon Energy (DVN) AMEX Duke Realty (DRE) NYSE EnCana (ECA) NYSE Exelon (EXC) NYSE General Dynamics (GD) NYSE General Electric (GE) NYSE Headwaters (HDWR) NASDAQ Impala Platinum (IMPUY) NYSE Intel (INTC) NASD Lockheed Martin (LMT) NYSE Nabors (NE) NYSE Newmont Mining (NEM) NYSE Noble (NE) NYSE Northrop Grumman (NOC) NYSE Petro-Canada (PCZ) NYSE PetroChina (PRT) NYSE Raytheon (RTN) NYSE Schlumberger (SLB) NYSE Tiffany (TIF) NYSE Toyota Motor (TM) NYSE Weight Watchers International (WTW) NYSE Funds American Century Global Gold Fund (BGEIX) American Century Zero-Coupon Bond Funds: Target Maturities Trust: 2005 (BTFIX) Target Maturities Trust: 2010 (BTTNX) Target Maturities Trust: 2015 (BTFTX) Target Maturities Trust: 2020 (BTTTX) Target Maturities Trust: 2025 (BTTRX) Target Maturities Trust: 2030 (ACTAX) 1-800-345-2021; www.americancentury.com Excelsior Energy and Natural Resources Fund (UMESX) 1-800-446-1012; www.excelsiorfunds.com Fidelity Investment Grade Bond Fund (FBNDX) Fidelity Low-Priced Stock Fund (FLPSX) 1-800-343-3548; www.fidelity.com Gabelli Gold Fund (GOLDX) 1-800-422-3554; www.gabelli.com ICON Energy Fund (ICENX) 1-888-389-4266; www.iconfunds.com Royce Total Return Fund (RYTRX) 1-800-221-4268; www.roycefunds.com Third Avenue Small-Cap Value Fund (TASCX) 1-800-880-8442; www.thirdave.com Tocqueville Gold Fund (TGLDX) 1-212-698-0800; www.tocqueville.com Vanguard Energy Fund (VGENX) Vanguard Precious Metals Fund 1-877-662-7447; www.vanguard.com To buy silver and platinum directly, use the Web site www.kitco.com.

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Stocks once again embarked upon a bull run—and this one was to be a bull run for the ages. Between 1991 and 2000, with oil prices remaining well under control, stocks staged one of the greatest rallies any financial market has ever seen. If you had invested in the S&P 500, say, by buying the Vanguard 500 Index Fund, in January 1991, you would have gained on average 20 percent a year for the next nine years. To put it differently, a $10,000 investment would have turned into more than $50,000. And because those nine years were ones of low inflation, your gains were mostly real gains in terms of their actual purchasing power.

A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan
by Ben Carlson
Published 14 May 2015

Seeing those juicy returns, the money poured into commodities-based funds as Wall Street was more than willing to fill the insatiable investor demand. Unfortunately, the financial crisis and the ensuing low-inflation environment have made for a difficult environment for commodities investors ever since. The Vanguard Precious Metals Fund was down 56 percent in 2008 alone. After a rally in 2009 and 2010, it dropped another 63 percent through 2014. These stocks are not for the faint of heart. Since the inception of the Vanguard Precious Metals Fund in 1985, the annual performance is roughly 5.6 percent per year, about half of the return of the S&P 500 in that time. And for their troubles, investors had to deal with double the volatility.

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Asset owners want a bigger alpha; asset managers would happily sell them the possibility of alpha and charge handsomely for the service of selling hope.”3 Although Wall Street controls the menu options, investors are beginning to take notice of their sales tactics. Vanguard, the low-cost fund provider has gone from upstart to industry leader with nearly $3 trillion in assets under management. While many consider Vanguard to be mainly an index fund provider, around half of all fund options are actually active funds. Over a quarter of the assets in stock funds are actively managed. Over the past decade, 91 percent of their funds, both active and indexed, were able to beat their peer group averages. The reason they are able to be so successful is because they keep their costs so low. The average expense ratio for a Vanguard Fund is only 0.19 percent, while the industry average is 1.08 percent.4 As Morningstar's Russ Kinnel wrote in a research report on mutual fund expenses, “If there's anything in the whole world of mutual funds that you can take to the bank, it's that expense ratios help you make a better decision.”

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Only 18 percent, or about 275 funds, of the initial 1,540 funds in the study both survived the full period and outperformed their benchmarks.10 In a separate study, Vanguard founder John Bogle discovered that almost half of all mutual funds created in the 1990s stock market boom ended up failing and following the technology bust there were 1,000 fund failures from 2000 to 2004.11 Exhibit 4: If Picking One Active Fund Is Hard . . . Rick Ferri and Alex Benke performed a study that spanned 16 years by looking at Vanguard's three-fund portfolio of total market index funds in U.S. stocks, foreign stocks, and U.S. bonds. You can see in Table 6.3 that these broadly diversified total market index funds beat the majority of active funds in their respective categories. Table 6.3 Index Fund Outperformance 1997 to 2012 Fund Category Index Win % Median Loss Median Win U.S.

Work Less, Live More: The Way to Semi-Retirement
by Robert Clyatt
Published 28 Sep 2007

The Soda Cracker: Single Mutual Fund The person who is terrified of investing, or who wants the ultimate in simplicity, can potentially get by with just a single mutual fund. Vanguard, along with other major fund firms, offers several packaged blends of index funds, under their Lifestyle, Balanced, and Target Retirement Date series. A good choice might be either Vanguard’s LifeStrategy Moderate or Conservative Growth (VSMGX or VSCGX) or Vanguard STAR (VGSTX). Most fund families have balanced funds, including the American Funds’ world allocation fund Capital Income Builder (RIRFX), which has an average yield approaching 4%.

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Likewise, a tilt or subindex may not have an index or traditional index fund that properly tracks it—for example, international small stocks or international large value stocks. You may occasionally find actively managed funds that, through some credible difference in trading strategy, develop a consistent deviation from their index or benchmark. For instance, the Vanguard High Yield fund consistently varies from the high yield index by holding only the better quality “junk” bonds. During good times, the fund underperforms the index; during bad times, its better-quality bonds hold up better than those in the index. This may be a tradeoff you would feel comfortable making.

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The Sandwich portfolio will get you coverage of all the major asset classes in percentages roughly similar to those in the Rational 190 | Work Less, Live More Investing portfolio. Missing will be just four of the 16 asset classes: commodities, high-yield, private equity, and market neutral hedge funds. All but one of the funds is a reliable Vanguard fund. The final one, American Century Foreign Bond (BEGBX), is a good way to get quality, medium-term foreign bonds. Even if you don’t have a Vanguard account, you should find all these funds or their equivalents through any brokerage account that allows you to buy funds through a mutual fund supermarket service.

Beyond the Random Walk: A Guide to Stock Market Anomalies and Low Risk Investing
by Vijay Singal
Published 15 Jun 2004

Mutual funds have low transaction costs compared to stocks or futures. Unfortunately, none of the mutual funds fits the requirements—either they hold too many stocks or they hold stocks that are too large. Total market funds, such as Vanguard Total Market, hold about 3,500 of the largest stocks and do not include any of the smaller stocks. Vanguard Total Market fund’s weighted market cap is $32.5 billion, much larger than the objective of a $25 million median market cap. Perhaps the best fit is the Dimensional Fund Advisors U.S. Micro Cap Portfolio (formerly U.S. 9-10 Small Company portfolio), which claims to invest in the “smallest 4 percent of the market universe.”

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MUTUAL FUNDS Many funds will not charge you a redemption fee provided you don’t trade multiple times in a year. Since the December effect requires only one buy and one sell in a year, it is unlikely that there will be any fees. Large, no-load S&P 500 index funds that are open to retail investors include Vanguard’s 500 Index Fund (VFINX), Dreyfus’s index fund (DSPIX), and Scudder Equity 500 Index Investment Fund (BTIEX). The fund returns are reported in Table 2.6. The returns earned are almost identical to those earned by the S&P 500. However, since the transaction cost is close to zero, the net return is about 1.8 percent over a five-day period.

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Internet References http://www.cme.com: The Chicago Mercantile Exchange is the primary exchange for trading stock index futures. http://www.indexfunds.com: Provides a list of mutual funds and exchangetraded funds indexed to the S&P 500 and the Nasdaq 100. http://www.rydexfunds.com, http://www.profunds.com, http://www.vanguard.com: Sites of mutual fund families that offer index funds. The first two do not impose any penalty for frequent trading. The January Effect and the New December Effect References for Further Reading Agrawal, Anup, and Kishore Tandon. 1994. Anomalies or Illusions? Evidence from Stock Markets in Eighteen Countries.

A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Eleventh Edition)
by Burton G. Malkiel
Published 5 Jan 2015

A SPECIFIC INDEX-FUND PORTFOLIO FOR AGING BABY BOOMERS Cash (5%)* Fidelity Money Market Fund (FXLXX) or Vanguard Prime Money Market Fund (VMMXX) Bonds and Bond Substitutes (27½%)† 7½% U.S. Vanguard IntermediateTerm Bond (VICSX) or iShares Corporate Bond ETF (LQD) 7½% Vanguard Emerging Market Government Bond Fund (VGAVX) 12½% Wisdom Tree Dividend Growth Fund (DGRW) or Vanguard Dividend Growth Fund (VDIGX)† Real Estate Equities (12½%) Vanguard REIT Index Fund (VGSIX) or Fidelity Spartan REIT Index Fund (FRXIX) Stocks (55%) 27% U.S. Stocks Schwab Total Stock Market Index Fund (SWTSX) or Vanguard Total Stock Market Index Fund (VTSMX) 14% Developed International Markets Schwab International Index Fund (SWISX) or Vanguard International Index Fund (VTMGX) 14% Emerging International Markets Vanguard Emerging Markets Index Fund (VEIEX) or Fidelity Spartan Emerging Markets Index Fund (FFMAX) *A short-term bond fund may be substituted for one of the money-market funds listed.

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To further illustrate the benefits of dollar-cost averaging, let’s move from a hypothetical to a real example. The following table shows the results (ignoring taxes) of a $500 initial investment made on January 1, 1978, and thereafter $100 per month, in the shares of the Vanguard 500 Index mutual fund. Less than $44,000 was committed to the program. The final value was over $480,000. ILLUSTRATION OF DOLLAR-COST AVERAGING WITH VANGUARD’S 500 INDEX FUND Year Ended December 31 Total Cost of Cumulative Investments Total Value of Shares Acquired 1978 $1,600 $1,669 1979 2,800 3,274 1980 4,000 5,755 1981 5,200 6,630 1982 6,400 9,487 1983 7,600 12,783 1984 8,800 14,864 1985 10,000 20,905 1986 11,200 25,935 1987 12,400 28,222 1988 13,600 34,080 1989 14,800 46,127 1990 16,000 45,804 1991 17,200 61,010 1992 18,400 66,818 1993 19,600 74,688 1994 20,800 76,780 1995 22,000 106,945 1996 23,200 132,769 1997 24,400 178,219 1998 25,600 230,621 1999 26,800 280,567 2000 28,000 256,274 2001 29,200 226,624 2002 30,400 177,505 2003 31,600 229,526 2004 32,800 255,481 2005 34,000 268,935 2006 35,200 312,320 2007 36,400 330,353 2008 37,600 208,942 2009 38,800 265,758 2010 40,000 306,758 2011 41,200 313,984 2012 42,400 364,935 2013 43,600 483,747 Of course, no one can be sure that the next forty-five years will provide the same returns as past periods.

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Stocks Schwab Total Stock Market Index Fund (SWTSX) or Vanguard Total Stock Market Index Fund (VTSMX) 14% Developed International Markets Schwab International Index Fund (SWISX) or Vanguard International Index Fund (VTMGX) 14% Emerging International Markets Vanguard Emerging Markets Index Fund (VEIEX) or Fidelity Spartan Emerging Markets Index Fund (FFMAX) *A short-term bond fund may be substituted for one of the money-market funds listed. †Although it doesn’t fit under the rubric of an index-fund portfolio, investors might consider putting part of the U.S. bond portfolio in Treasury inflation-protection securities. The dividend growth and corporate bond funds are also an exception since they are not standard index funds.

The Automatic Millionaire, Expanded and Updated: A Powerful One-Step Plan to Live and Finish Rich
by David Bach
Published 27 Dec 2016

But really the industry is dominated by the three big: Vanguard, Fidelty, and T. Rowe Price. Combined, they account for 71 percent of the industry, so here’s a list to start with: Vanguard 1-877-662-7447 www.​vanguard.​com Ask about the Vanguard Life Strategy Funds (Vanguard’s asset allocation funds) and Target Retirement Funds. Also ask about the Vanguard STAR Fund (this is a “fund of funds” asset allocation product created using various Vanguard funds). Finally, ask about the Vanguard Balanced Fund, a very low-cost balanced fund with an excellent long-term track record. Fidelity Investments 1-800-FIDELITY (343-3548-9) www.​fidelity.​com Ask about the Fidelity Freedom Funds.

Heads I Win, Tails I Win
by Spencer Jakab
Published 21 Jun 2016

That seemed awfully high, and I realized it was run by an actual human being who put on a suit and tie and went to an office building every weekday and tried to pick stocks and bonds for me based on my age. Sure enough, I compared my Fidelity 2035 fund to one targeting the same date by Vanguard, which uses index funds only, rebalancing them each year. Vanguard’s expense ratio is 0.18 percent. Over the last ten years, as a result of costs but also investing decisions, $10,000 invested in the Fidelity fund would have grown to $16,876, while it would have grown to $18,145 in the Vanguard fund. That’s a pretty big difference—possibly enough to justify using Fidelity’s lower-cost stock and bond index funds alone and rebalancing them myself manually once a year.

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The basic idea is to do more or less what I did in the second example by establishing a “glide path” of asset allocation that rebalances and gets less risky as retirement nears. For example, one offered by mutual fund giant Vanguard Group supposedly appropriate for me, a forty-six-year-old, is the Vanguard Target Retirement 2035 Fund. Nearly 50 percent of assets are in U.S. stocks and a bit less than a third in international ones. A fund offered by the same company for someone who might retire around 2060 has 54 percent and 36 percent in those two categories, respectively. I can’t recommend one product over another, but will point out that all target date funds are most definitely not equal.

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The Wall Street Journal’s 401(k) plan is run by Fidelity Investments, and in addition to various actively managed funds that I avoid like the plague (I’ll explain why in chapter 8, “Where Are the Customers’ Yachts?”), there are some low-fee index funds they offer that are run by a computer. When a big chunk of my savings was automatically put into the Fidelity Freedom 2035 fund, I assumed that it just held a mix of index funds similar to the Vanguard fund I used as an example. I contribute the most I can but have a policy of only checking my 401(k) rarely. With my investments automated and a target date fund that was supposed to handle rebalancing, that seemed prudent. As I wrote this chapter I decided to take a peek and spotted my fund’s expense ratio.

Financial Freedom: A Proven Path to All the Money You Will Ever Need
by Grant Sabatier
Published 5 Feb 2019

Some of the most popular index funds with the lowest fees are the Vanguard Total Stock Market Index Fund (VTSAX) and the Vanguard Total Stock Market Index ETF (VTI), both of which hold the top 2,800 stocks in the United States; the Schwab Total Stock Market Index ETF (SWTSX); BlackRock’s iShares Edge MSCI Min Vol USA ETF (USMV); and the Fidelity Total Market Index Fund Premium Class (FSTVX). There are also many companies that have an S&P 500 fund, like the Vanguard 500 Index Fund Investor Shares (VFINX); the Vanguard 500 Index Fund Admiral Shares (VFIAX); the Schwab S&P 500 Index Fund (SWPPX); and the Fidelity Spartan 500 Index Shares (FUSEX).

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You can easily buy them through a bond fund (which holds a lot of bonds to diversify your risks and maintain an expected rate of return). Check out the Vanguard Total Bond Market Index Fund, which invests in a diversified group of investment-grade (aka high-quality) bonds. This particular fund contains about 30 percent corporate bonds and 70 percent government bonds. Bond funds are low risk but carry a higher potential return than most savings accounts. This allows you to at least keep up with inflation (and potentially beat it). Between 2012 and 2017 the Vanguard Total Bond Market Index Fund has returned approximately 2 to 3 percent each year. When you have money invested in a bond fund in an after-tax account, you can withdraw the money at any time.

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Depending on who runs your retirement accounts at work or the investment company you choose, you may have access to either a total U.S. market or an S&P 500 fund, not both. Either would be a great choice, and the long-term investment returns will likely be similar between the two. Using the Vanguard 500 Index Fund (VFINX) and Vanguard Total Stock Market Index Fund (VTSAX) as examples, in the table below you can see the returns over the past one, three, five, and ten years were pretty similar. If you are currently investing, how well do your portfolio returns compare to those of either a total stock market or S&P 500 fund?

In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest
by Andrew W. Lo and Stephen R. Foerster
Published 16 Aug 2021

“Trading is your enemy, because it’s based on emotion.”76 More recently, Bogle quantified the “all-in costs” of actively managed funds compared to Vanguard’s index funds.77 Actively managed funds, according to the calculations, had an average expense ratio of 1.12 percent, transaction costs of 0.50 percent, a “cash drag” (since funds typically hold cash reserves) of 0.15 percent, and sales charges and fees of 0.50 percent, totaling 2.27 percent. Vanguard’s index funds, however, only had an expense ratio of 0.06 percent. Furthermore, actively managed funds had a tax inefficiency differential (resulting from realized capital gains that are taxed, compared with untaxed unrealized gains) of 0.45 percent compared to the index fund, resulting in a 2.66 percent differential.

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It comes from naval history: The Battle of the Nile, one of the great victories of all time, with the British sinking the French fleet in Aboukir Bay. There was a dispatch in there by Admiral Horatio Nelson off the deck of HMS Vanguard.”42 Bogle described the introduction of the first index mutual fund, initially called the First Index Investment Trust and later the Vanguard 500 Index Fund. “The Vanguard Group was incorporated in September 1974 and started operations in May 1975. The understanding was that Vanguard was to limit itself to administration and not get into investment management or distribution; those functions would stay with Wellington Management Company. However, for strategic reasons, I decided we needed to be in the management business.

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In August 1976 in his Newsweek article titled “Index-Fund Investing,” Samuelson described how, in a column he wrote in the previous year, he had noted that some wealthy investors and corporate pension funds were starting to take advantage of index investing, but there was no convenient investment vehicle for most investors: one that “apes the whole market, requires no load [sales commission], and that keeps commission turnover and management fees to the feasible minimum.”59 By August 1976, however, Samuelson was delighted that his “implicit prayer has been answered—something called the First Index Investment Trust [Bogle’s Vanguard index fund].”60 In this article, Samuelson noted that the fund met four of his five prudent requirements: it was available to anyone with a relatively modest $1,500, matched the performance of the S&P 500, had very low fees (about 0.20 percent) and low turnover, and provided the broadest possible diversification.

A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing
by Burton G. Malkiel
Published 10 Jan 2011

A SPECIFIC INDEX-FUND PORTFOLIO FOR AGING BABY BOOMERS Cash (5%)* Fidelity Money Market Fund (FORXX), or Vanguard Prime Money Market Fund (VMMXX) Bonds (27½%)† Vanguard Total Bond Market Index Fund (VBMFX) Real Estate Equities (12½%) Vanguard REIT Index Fund (VGSIX) Stocks (55%) U.S. Stocks (27%) Fidelity Spartan (FSTMX), T. Rowe Price (POMIX), or Vanguard (VTSMX) Total Stock Market Index Fund Developed International Markets (14%) Fidelity Spartan (VSIIX), or Vanguard (VDMIX) International Index Fund Emerging International Markets (14%) Vanguard Emerging Markets Index Fund (VEIEX) Remember also that I am assuming here that you hold most, if not all, of your securities in tax-advantaged retirement plans.

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To further illustrate the benefits of dollar-cost averaging, let’s move from a hypothetical to a real example. The following table shows the results (ignoring taxes) of a $500 initial investment made on January 1, 1978, and thereafter $100 per month, in the shares of the Vanguard 500 Index mutual fund. Less than $39,000 was committed to the program. The final value was over $265,000. ILLUSTRATION OF DOLLAR-COST AVERAGING WITH VANGUARD’S 500 INDEX FUND Year Ended December 31 Total Cost of Cumulative Investments Total Value of Shares Acquired 1978 $1,600.00 $1,699.26 1979 2,800.00 3,273.66 1980 4,000.00 5,755.25 1981 5,200.00 6,630.16 1982 6,400.00 9,487.21 1983 7,600.00 12,783.16 1984 8,800.00 14,863.80 1985 10,000.00 20,905.05 1986 11,200.00 25,934.97 1987 12,400.00 28,221.32 1988 13,600.00 34,079.49 1989 14,800.00 46,126.09 1990 16,000.00 45,803.07 1991 17,200.00 61,009.59 1992 18,400.00 66,816.94 1993 19,600.00 74,687.08 1994 20,800.00 76,779.25 1995 22,000.00 106,944.33 1996 23,200.00 132,767.97 1997 24,400.00 178,217.41 1998 25,600.00 230,619.41 1999 26,800.00 280,564.59 2000 28,000.00 256,271.48 2001 29,200.00 226,622.13 2002 30,400.00 177,503.25 2003 31,600.00 229,523.84 2004 32,800.00 255,479.22 2005 34,000.00 268,932.69 2006 35,200.00 312,317.65 2007 36,400.00 330,350.05 2008 37,600.00 208,940.55 2009 38,800.00 265,755.99 Of course, no one can be sure that the next forty years will provide the same returns as past periods.

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Moreover, if your common stocks will be held in taxable accounts, you may want to consider the tax-managed index funds discussed in the next section. Finally, note that I have given you a choice of index funds from different mutual-fund complexes. Because of my long association with the Vanguard Group, I wanted also to suggest a number of non-Vanguard funds. All the funds listed have moderate expense ratios and are no-load. More information on these funds, including telephone numbers and Web sites, is listed in the Random Walker’s Address Book, which follows this chapter. ETFs and the Tax-Managed Index Fund One of the advantages, noted above, of passive portfolio management (that is, simply buying and holding an index fund) is that such a strategy minimizes transactions costs as well as taxes.

Money Mavericks: Confessions of a Hedge Fund Manager
by Lars Kroijer
Published 26 Jul 2010

The example described needs one further explanation. Namely, how did the hedge fund generate its 10 per cent return? If the hedge fund was just long the Standard & Poor’s 500 index and that index was up 10 per cent for the year, Mr Straw would have paid large fees for very little additional value. He could just have bought a Vanguard index fund and paid 0.2 per cent in total fees, not 7 per cent (although he might not be able to avoid some pension-fund costs to gain tax advantages). The directional funds still charge the fees, but do not add as much value (they just own something that went up) as those with 10 per cent pure alpha (value generation) – more on this later.

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As the fallout from the turmoil of 2008 shows, there seems to be a good deal of evidence of at least the first two points. To get an idea of the scale of fees, imagine Mr Straw invested $100 in the type of fund used in the example above, while Mrs Straw takes $100 from her savings and puts it in a Vanguard fund. Now suppose that both those investments return 10 per cent per year before any fees over the ten-year period of the investment until Mr and Mrs Straw are ready for retirement. The results are both obvious and staggering. Investment comparison A simplistic example, but the fees to the hedge fund and fund of funds are ten times higher than those to Vanguard, and this is before pension-fund costs, expenses or trading costs.

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When buying exposure to a stock index there are today so many competing products (ETFs, index funds, mutual funds, futures, etc.) that it should be possible to achieve the kind of exposure you desire and still be tax optimised (capital gains versus dividend income, etc.). With the ever-changing tax regime and planning possibilities available, optimising a portfolio for tax is well worth getting expert advice on. Where to invest Along with stock-market futures, index products like Vanguard tracker funds or the many ETFs (exchange traded funds) offer the cheapest access to the various indices they represent. If you buy 20 mutual funds that try to beat the S&P500 index, the chances are that on average they will underperform the index by approximately their fees. The fees in these mutual funds vary but, including trading and related expenses, come to around 1.5–2.0 per cent per year compared with tracker fund fees of roughly 0.2 per cent per year.

Early Retirement Guide: 40 is the new 65
by Manish Thakur
Published 20 Dec 2015

Speak with your financial advisor about your goals to find an investment that works well for you and your financial situation. Many people find success through other means, but this is the tried and true method that has been used by thousands of other people on their independence journeys. Challenges: 1. Set up a Vanguard fund today! 2. Put in at least $100 into an index fund after setting up your account Set up Automatic Deposit and Investing After understanding your spending habits and setting up your investment fund, it's time to set your investing on autopilot. After working through the budgeting section, you should understand how much is needed each month.

Your Money or Your Life: 9 Steps to Transforming Your Relationship With Money and Achieving Financial Independence: Revised and Updated for the 21st Century
by Vicki Robin , Joe Dominguez and Monique Tilford
Published 31 Aug 1992

There are other mutual funds, some with socially responsible screens that may be important to you. Trying to speak to those FIers who want to keep it simple, he offered the four Vanguard Funds to narrow the field of thousands of mutual funds down to something manageable. Here’s his explanation: Mark’s suggestions for Your NEW FI Investment Strategy The most conservative approach for this strategy would be to use the Life-Strategy Income Fund, the first of the four Vanguard Funds. Although marketed as a fund for those in retirement, it is also applicable for those who are FI and no longer working for money. This fund seeks current income and has some growth of capital.

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SRI has grown as a field from 55 socially screened mutual funds with $12 billion in assets in 2005 to 260 funds with $202 billion in assets in 2007.2 Brent Kessel, cofounder of Abacus Portfolios and author of It’s Not About the Money says of this approach to investing, “While SRI was originally considered a fringe movement of tree-hugging Californians, the downfall of such corporate giants as Enron, Tyco, and Arthur Andersen brought a whole new population of SRI investors in from both sides of the political aisle.” Vanguard, the family of funds Mark uses with clients, also has an SRI fund, the Vanguard FTSE. Calvert, Ariel and Domini Funds have been around longer, but now, with the popularity of SRI, most mutual funds will offer some screened funds. For those who want to go this route, several FIers recommend the Web site of the Social Investment Forum, www.socialinvest.org, which offers comprehensive contacts, resources and information on socially responsible investing and is a good source of information about trends in the field and how these vehicles compare to the conventional market.

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See frugality Thurow, Lester Tightwad Gazette, The (Dacyczyn) Time Bind, The (Hochschild) Time Dollars System tool sharing trading possessions transportation costs auto insurance consumer price index and expense category saving money on subcategories list trash treasury bonds Treasury Direct Treasury Inflation-Protected Securities (TIPS) Trimbath, Tom unconscious spending unemployment United Nations World Commission on Environment and Development unpaid jobs U.S. treasury bonds used items, buying utilities, subcategories list utopian communities vacations value, researching purchases valuing life energy aligning values and behavior evaluating expenditures joy-to-stuff ratio by maximizing income by minimizing spending Vanguard Funds Veblen, Thorstein venture capital victim mentality volunteer vacations volunteerism activism and advocacy after crossover point finding projects and causes freedom of helping and caring redefined Wachtel, Paul wages, disconnecting from work. See work, redefining wall charts adding investment income to awareness from hanging recording income and expenses Wall Street (movie) Wall Street Journal, The, bond information Wampler, Dave wealth, not equal to financial independence What Color Is Your Parachute?

Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns & Long Term Investment Strategies
by Jeremy J. Siegel
Published 18 Dec 2007

Indexing became so popular that in the first six months of 1999 nearly 70 percent of the money that was invested went into index funds.13 By 2007, all Vanguard 500 Index funds had attracted over $200 billion in assets, but the largest single equity mutual fund is the American Growth Fund with assets of $185 billion.14 One of the attractions of index funds is their extremely low cost. The total annual cost in the Vanguard 500 Index Fund is only 0.18 percent of market value (and as low as 2 basis points for large institutional investors). Because of proprietary trading techniques and interest income from loaning securities, Vanguard S&P 500 Index funds for individual investors have fallen only 9 basis points behind the index over the last 10 years, and its institutional index funds have actually outperformed the index.15 THE PITFALLS OF CAPITALIZATION-WEIGHTED INDEXING Despite their past success, the popularity of indexing, especially those funds linked to the S&P 500 Index, may cause problems for index 12 Five years before the Vanguard 500 Index Fund, Wells Fargo created an equally weighted index fund called “Samsonite,” but its assets remained relatively small. 13 Heather Bell, “Vanguard 500 Turns 25, Legacy in Passive Investing,” Journal of Index Issues, Fourth Quarter 2001, pp. 8–10. 14 Vanguard’s number includes assets of its 500 Index Fund open to both individuals and institutions. 15 The Vanguard Institutional Index Fund Plus shares, with a minimum investment of $200 million, have outperformed the S&P 500 Index by 7 basis points in the 10 years following the fund’s inception on July 7, 1997. 352 PART 5 Building Wealth through Stocks investors in the future.

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Steel Group, 49 Utilities sector: in GICS, 53 global shares in, 175i, 177 Utility, 322 Valuation, 144–145 value versus growth stocks and, 144–145 Value Line Index, 47n, 256 Value stocks, 362–363 growth stocks versus, 144–145 nature of, 157 Value-weighted indexes, 42–45 (See also Center for Research in Security Prices [CRSP] index; Nasdaq Index; Standard & Poor’s [S&P] index) Valuing Wall Street (Smithers and Wright), 117 Vanguard 500 Index Fund, 263n Vanguard Institutional Index Fund Plus, 351n Vanguard S&P 500 Index funds, 351 Van Strum, Kenneth S., 80n Verizon, 177 Vesting, 106 Viceira, Luis M., 35n Vietnam War, 233 bear market and, 85 Virginia Carolina Chemicals, 60i, 63 Vishny, R., 326n VIX Index, 281–282, 282i, 334 Vodafone, 177 Volatility (see Market volatility) 380 Volcker, Paul, 9, 195 Vuolteenaho, Tuomo, 158n Wachovia Bank, 21n Wages, Nixon’s freezing of, 194 Wall Street Journal, 38, 290 Wal-Mart, 155, 176i, 177 Wang, Jiang, 304n War: market movements and, 225, 231–235 (See also specific wars) War on terrorism, 234 Weber, Steven, 218n Wein, Byron, 86 Index Welch, Ivo, 325n Wells Fargo, 351n Werner, Walter, 12n, 21n Western Co., 63 White, Weld & Co., 97 Williams, Frank J., 319q Williams, John Burr, 101 Wilshire 5000 index, 342 Wisdom Tree Investments, 356 Withers, Hartley, 81 Wm.

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Because of proprietary trading techniques and interest income from loaning securities, Vanguard S&P 500 Index funds for individual investors have fallen only 9 basis points behind the index over the last 10 years, and its institutional index funds have actually outperformed the index.15 THE PITFALLS OF CAPITALIZATION-WEIGHTED INDEXING Despite their past success, the popularity of indexing, especially those funds linked to the S&P 500 Index, may cause problems for index 12 Five years before the Vanguard 500 Index Fund, Wells Fargo created an equally weighted index fund called “Samsonite,” but its assets remained relatively small. 13 Heather Bell, “Vanguard 500 Turns 25, Legacy in Passive Investing,” Journal of Index Issues, Fourth Quarter 2001, pp. 8–10. 14 Vanguard’s number includes assets of its 500 Index Fund open to both individuals and institutions. 15 The Vanguard Institutional Index Fund Plus shares, with a minimum investment of $200 million, have outperformed the S&P 500 Index by 7 basis points in the 10 years following the fund’s inception on July 7, 1997. 352 PART 5 Building Wealth through Stocks investors in the future.

I Will Teach You To Be Rich
by Sethi, Ramit
Published 22 Mar 2009

Creating your own portfolio takes significant research. As an example of what you might end up with, here’s a sample portfolio made of all Vanguard funds: Stocks (“Equities”) 30 percent—Total Market Index/equities (VTSMX) 20 percent—Total International Stock Index/equities (VGTSX) 20 percent—REIT index/equities (VGSIX) Bonds 5 percent—U.S. treasury bond index/bonds (VFISX) 5 percent—Vanguard Intermediate-Term Treasury Fund (VFITX) 5 percent—Vanguard Long-Term Treasury Fund (VUSTX) 15 percent—TIPS bond index/bonds (VIPSX) These are just a few of the literally thousands of index funds that exist. You can be flexible with the funds.

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Similarly, different types of bonds offer different benefits, including rates of return and tax advantages. STOCKS AND BONDS HAVE MANY FLAVORS WHAT A GRANNY NEEDS: TYPICAL ASSET ALLOCATIONS BY AGE Here’s what typical investors’ asset allocations—remember, that’s the mix of different investments—might look like as they get older. These figures are taken from Vanguard’s lifecycle funds. The fact that performance varies so much in each asset class means two things: First, if you’re trying to make a quick buck off investing, you’ll usually lose money because you have no idea what will happen in the near future. Anyone who tells you they do is a fool or a commission-based salesman.

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And it doubles from there, too. Of course, you could have even more by adding a small amount every month using the power of compounding. CHOOSING A LIFECYCLE FUND FOR YOUR ROTH IRA Two companies with popular lifecycle funds are Vanguard and T. Rowe Price, both of which are great. Vanguard’s Target Date 2045 fund (that is, assuming you’ll retire around sixty-five, your “target date” of retirement will be somewhere around 2045) has a very low 0.19 percent expense ratio. The minimum investment to get started is $3,000, and you can set up monthly recurring contributions of at least $100 each. (Note: Vanguard also charges a $30 annual account maintenance fee which you can get waived by signing up at Vanguard.com and getting your account notifications by e-mail instead of snail mail.)

Portfolio Design: A Modern Approach to Asset Allocation
by R. Marston
Published 29 Mar 2011

Since geometric averages are involved, the premium is measured using the compound formula, (1.102)/(1.099) – 1 = 0.3%. And the estimate of the EAFE return based on the S&P 500’s 9.4 percent return is calculated as (1.094)∗(1.003) – 1 = 9.7%. 14. These portfolios are all invested in Vanguard Index Funds. The analysis below substitutes the bond and stock indexes which most closely correspond to the Vanguard funds involved. 15. Margaritaville was developed by Scott Burns, a Dallas Morning News financial columnist. Dr. Bernstein is a financial advisor to high net worth individuals, and Second Grader is presumably a young investor with a long enough horizon to invest 90 percent in equity!

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By the time of retirement 15 years later, this investor will have only 50 percent invested A 303 P1: a/b c15 P2: c/d QC: e/f JWBT412-Marston T1: g December 20, 2010 17:6 304 Printer: Courier Westford PORTFOLIO DESIGN At Re
rement 15 years from re
rement Foreign Stocks 15% Foreign Stocks 10% Bonds 25% U.S. Stocks 40% U.S. Stocks 60% Ordinary Bonds 40% Infla
on Protected Bonds 10% FIGURE 15.1 Portfolios for Investors 15 years Prior to and at Retirement (Vanguard 2025 Target Retirement Fund) Source: www.vanguard.com. in stocks and 50 percent invested in bonds with a 10 percent allocation in inflation-protected bonds (to help protect against inflation in retirement). Target retirement funds are designed to model the life cycle of investing beginning with the early years of working when very aggressive allocations are called for.

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So in any given simulation, the man or woman may die early in retirement or live long past the median age of death for that cohort. PORTFOLIOS OF STOCKS AND BONDS By the time of retirement, the investor should have reduced the proportion of stocks in the portfolio way below that chosen during earlier working years. As discussed above, the Vanguard Target Retirement Fund shifts the investor from a 90 percent stock portfolio when the investor is 25 years from retirement to a 50/50 portfolio at retirement. The 50/50 retirement portfolio is a common one chosen, at least early in retirement. Because risk is central to the success or failure of spending rules, we will try to reduce risk by diversifying the portfolio just as in the previous chapter on foundations.

Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond: The Innovative Investor's Guide to Bitcoin and Beyond
by Chris Burniske and Jack Tatar
Published 19 Oct 2017

A recent article in Huffington Post had this to say: Millennials, assisted by a cadre of impressively socially awkward Bitcoin startup VC types, are piling intellectual and financial capital into this whole cryptocurrency idea—Bitcoin, Ethereum, all of it. What “e-” in front of any noun did for techie investor excitement in the 1990s, “crypto” and “blockchain” seems to be doing today.7 Are millennials turning to bitcoin and cryptoassets for their investments? Is a Vanguard fund or a small investment in Apple any better? Whereas the Vanguard fund has a minimum investment amount and buying an equity will require a commission, millennials see cryptoasset markets as a way to begin investing with a modest amount of money and in small increments, which is often not possible with stocks or funds.8 The important point is that at least they’re doing something to invest their funds and build the groundwork for a healthy financial future.

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See Union Square Ventures Utility, 109, 115 of blockchains, 204 Utility Value, 117–119, 176–177, 180 Valuation, xiv of cryptoassets, 175–177 discounting and, 179–182 fundamental analysis and, 171–184 idea of, 152 methods of, 204–205 velocity and, 177–179 Value, 13, 15, 124 of blockchains, 255 characteristics based on, 79 of companies, 152 of cryptocommodities, 51 governments and, 34 increases in, 202 of investments, 85, 89, 90 loss of, 89 metal and, 143–144 of networks, 41, 44, 123, 171, 188, 196, 205, 291n1 society and, 35 as speculative, 117–119 of transactions, 204 of Yuan (China), 133–134 Value-traps, 265 Vanguard fund, 282 Variables, 16, 212 Variegation, 142 Vasek, Marie, 215 Vaulting, 225 VCs. See Venture capital investors Velocity of USD, 178 valuation and, 177–179 Venture capital investors (VCs), 57, 199 Venture capitalism, 247–253 blockchains and, 254 Virtual currency, 275–276 Volatility, 104.

How to American: An Immigrant's Guide to Disappointing Your Parents
by Jimmy O. Yang
Published 13 Mar 2018

But at the same time, I knew how proud my dad was of his son who was following in his footsteps to become a financial adviser. He’d ask me with a sweet sense of pride on his face: “How’s the internship going?” “It’s going great! Today we worked on a couple Vanguard funds.” I said it with a fake stapled grin on my stupid face. I didn’t have the heart to tell him I hated the internship and I thought Vanguard funds were fucking stupid. During my last week of the internship, Dad delivered some breaking news: “Jimmy! My friend at Smith Barney said he wants to offer you a full-time job when you graduate! Congratulations!” I’d never seen him so excited.

Turning the Flywheel: A Monograph to Accompany Good to Great
by Jim Collins
Published 26 Feb 2019

Notes 1Stephen Ressler, Understanding the World’s Greatest Structures (Chantilly, VA: The Teaching Company, 2011), Lecture 24. 2Brad Stone, The Everything Store (New York, NY: Little, Brown and Company, 2013), 6–8, 12, 14, 100–102, 126–128, 188, 262–263, 268. 3Erika Fry, “Mutual Fund Giant Vanguard Flexes Its Muscles,” Fortune, December 8, 2016, http://fortune.com/vanguard-mutual-funds-investment/; “Fast Facts about Vanguard,” The Vanguard Group, Inc, Accessed in 2017, https://about.vanguard.com/who-we-are/fast-facts/. 4Robert N. Noyce, “MOSFET Semiconductor IC Memories,” Electronics World, October 1970, 46; Gene Bylinsky, “How Intel Won Its Bet on Memory Chips,” Fortune, November 1973, 142–147, 184; Robert N.

Playing With FIRE (Financial Independence Retire Early): How Far Would You Go for Financial Freedom?
by Scott Rieckens and Mr. Money Mustache
Published 1 Jan 2019

Money Mustache community and philosophy “a worldwide cult phenomenon” — the blog has 300 million page views since its inception in 2011 — and he addressed Pete by telling him that he was “in the top-five most-requested guests for this podcast.” That had my attention. Pete explained that all he’d done was live like he was in college even after he was making a good salary as an engineer. Over the years, he had saved a total of between twenty-five and twenty-eight times his annual spending and invested that money in Vanguard index funds (which wouldn’t be the last time I’d hear that recommendation!). Then, at thirty years old, Pete and his wife quit their cubicle jobs when their baby boy was born, since their investments were now creating enough passive income to recover their living expenses. He went on to say that this same basic formula works for most people.

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If you’ve set up an investment account before, you probably know how simple it is. But if not and/or if you’re like me, the process of setting up the account can feel intimidating and can be a reason to put off investing. You might not be ready to invest yet, but setting up the account is still an important first step and Vanguard allows you to fund your account at a later date. Here are the steps to follow to open a Vanguard account: Go to personal.vanguard.com and click, “Open Your Account.” You’ll be asked if you’re opening a new account or moving an outside account, and their system will guide you through the process from there.

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Only 15 percent of professionals manage to beat it, and what’s the likelihood that the person you’ve hired is one of those 15 percent? Not very high. Because an index fund doesn’t require a building full of portfolio managers, analysts, and traders to work diligently day in and day out to try to beat the stock market, indexing is dirt cheap: the expense ratio of the Vanguard index fund VTSAX, a FIRE favorite, was 0.04% when this book went to press. Meanwhile, the typical human-managed mutual funds typically charge 1 to 2 percent per year. In the past, that mutual fund cost didn’t ring alarm bells for me. A percent or two seemed like a perfectly reasonable amount WHAT THE HECK IS AN INDEX FUND?

The Intelligent Investor (Collins Business Essentials)
by Benjamin Graham and Jason Zweig
Published 1 Jan 1949

Since Graham last wrote, two inflation-fighters have become widely available to investors: REITs. Real Estate Investment Trusts, or REITs (pronounced “reets”), are companies that own and collect rent from commercial and residential properties.10 Bundled into real-estate mutual funds, REITs do a decent job of combating inflation. The best choice is Vanguard REIT Index Fund; other relatively low-cost choices include Cohen & Steers Realty Shares, Columbia Real Estate Equity Fund, and Fidelity Real Estate Investment Fund.11 While a REIT fund is unlikely to be a foolproof inflation-fighter, in the long run it should give you some defense against the erosion of purchasing power without hampering your overall returns.

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This behavior is so prevalent that finance scholars simply call it herding.4 But by protecting their own fee income, fund managers compromise their ability to produce superior returns for their outside investors. FIGURE 9-2 The Funnel of Fund Performance Looking back from December 31, 2002, how many U.S. stock funds outperformed Vanguard 500 Index Fund? One year: 1,186 of 2,423 funds (or 48.9%) Three years: 1,157 of 1,944 funds (or 59.5%) Five years: 768 of 1,494 funds (or 51.4%) Ten years: 227 of 728 funds (or 31.2%) Fifteen years: 125 of 445 funds (or 28.1%) Twenty years: 37 of 248 funds (or 14.9%) Source: Lipper Inc. Because of their fat costs and bad behavior, most funds fail to earn their keep.

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Longleaf’s Mason Hawkins looks for corporate managers who are “good partners”—meaning that they communicate candidly about problems, have clear plans for allocating current and future cash flow, and own sizable stakes in the company’s stock (preferably through cash purchases rather than through grants of options). But “if managements talk more about the stock price than about the business,” warns Robert Torray of the Torray Fund, “we’re not interested.” Christopher Davis of the Davis Funds favors firms that limit issuance of stock options to roughly 3% of shares outstanding. At Vanguard Primecap Fund, Howard Schow tracks “what the company said one year and what happened the next. We want to see not only whether managements are honest with shareholders but also whether they’re honest with themselves.” (If a company boss insists that all is hunky-dory when business is sputtering, watch out!)

Crapshoot Investing: How Tech-Savvy Traders and Clueless Regulators Turned the Stock Market Into a Casino
by Jim McTague
Published 1 Mar 2011

A third participant wrote the SEC in advance of the meeting, “Implementing any type of regulation that would limit the tools or the effectiveness of automation available for use by any class of investor in the name of ‘fairness’ would turn back the clock on the U.S. equity market and undo years of innovation and investment.” The only mutual fund company invited to sit on the panel was Vanguard Funds. It was an outlier among mutual fund firms in that it staunchly defended HFT, arguing that the activity kept costs down by narrowing stock spreads and reducing transaction costs. Vanguard had a personal agenda: It was one of the largest managers of exchange-traded funds (ETFs), a product that was a cross between a mutual fund and an index option.

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See consolidated tape time delay of consolidated tape, 72, 199-205, 225-226 “Toxic Equity Trading Order Flow on Wall Street: The Real Force Behind the Explosion in Volume and Volatility” (Arnuk and Saluzzi), 19 Toyota, approval ratings, 92 trade-through rule, 144-146 Tradeworx, 153-155 Trading Places (film), 29 Trillium Brokerage Services LLC, 210, 212 U–V uncertainty, volatility and, 177 unification of commodities and equities exchanges, 36, 70 “upstairs” market, 119-121 Uptick Rule, 50-51, 54 Vanguard Funds, 185 Vega, Clara, 98 volatility during Flash Crash, 72-73 after Great Recession, 2-3 in high-frequency trading (HFT), 8-9 reasons for, 175-182 rhythm of, 176-177 volume of trading declines in NYSE, 146-147 due to automated trading, 64 on equities exchanges, 31 during Flash Crash, 81 inflating, 22 revenue generated from, 165-166 W–Z Wachovia National Bank, 100 Waddell & Reed Financial, Inc., 69, 213-219 Warner, Mark, 187 Washington Post, 196 Weild, David, 142-143 Weisberg, Theodore, 222 Wells Fargo, 100 Whalen, Christopher, 40 Where Are the Customer’s Yachts?

Stocks for the Long Run 5/E: the Definitive Guide to Financial Market Returns & Long-Term Investment Strategies
by Jeremy Siegel
Published 7 Jan 2014

Indexing became so popular that in the first six months of 1999 nearly 70 percent of the money that was invested went into index funds.14 By 2013, all Vanguard 500 Index funds had attracted over $275 billion in assets, and Vanguard’s Total Stock Market Funds, which include smaller stocks, attracted $250 billion. One of the attractions of index funds is their extremely low cost. The total annual cost in the Vanguard 500 Index Fund is only 0.15 percent of market value (and as low as 2 basis points for large institutional investors). Because of proprietary trading techniques and interest income from loaning securities, Vanguard S&P 500 Index funds for individual investors have fallen only 9 basis points behind the index over the last 10 years, and its S&P 500 Index fund for institutional investors has actually outperformed the benchmark index.15 THE PITFALLS OF CAPITALIZATION-WEIGHTED INDEXING Despite the past success of index funds, their popularity, especially those funds linked to the S&P 500 Index, may cause problems for index investors in the future.

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Bogle, The Little Book of Common Sense Investing, Hoboken, NJ: Wiley, 2007, Chap. 9. 12. Ellis, “The Loser’s Game,” Financial Analysts Journal, p. 19. 13. Five years before the Vanguard 500 Index Fund, Wells Fargo created an equally weighted index fund called “Samsonite,” but its assets remained relatively small. 14. Heather Bell, “Vanguard 500 Turns 25, Legacy in Passive Investing,” Journal of Index Issues, Fourth Quarter 2001, pp. 8-10. 15. The Vanguard Institutional Index Fund Plus shares, with a minimum investment of $200 million, have outperformed the S&P 500 Index by 3 basis points over the 10 years ending June 30, 2013. 16.

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THE INCREASED POPULARITY OF PASSIVE INVESTING Many investors have realized that the poor performance of actively managed funds relative to benchmark indexes strongly implies that they would do very well to just equal the market return of one of the broad-based indexes. Thus, the 1990s witnessed an enormous increase in passive investing, the placement of funds whose sole purpose was to match the performance of an index. The oldest and most popular of the index funds is the Vanguard 500 Index Fund.13 The fund, started by visionary John Bogle, raised only $11.4 million when it debuted in 1976, and few thought the concept would survive. But slowly and surely, indexing gathered momentum, and the fund’s assets reached $17 billion at the end of 1995. In the latter stages of the 1990s bull market, the popularity of indexing soared.

The Smartest Investment Book You'll Ever Read: The Simple, Stress-Free Way to Reach Your Investment Goals
by Daniel R. Solin
Published 7 Nov 2006

First, he looked at the performance of all 494 actively managed mutual funds in the United States that had, as their goal, beating the S&P 500 Index for the five-year period July 1993 through June 1998. How hard could this be? The managers of these funds are among the best, brightest and highest-paid people in this country. Some of them earn millions of dollars to beat the S&P. Their funds charge more than eight times the cost of a simple index fund, like the Vanguard 500 Index Fund (VFINX). And we know this fund will always give investors the returns of the S&P 500 Index (reduced only by the amount of its low fees), because it is set up to do precisely that. O'Neal then did the same analysis for the next five-year period, from July 1998 through June 2003. Here is what he found: Only 46% of the actively managed funds beat the index during the first five-year period and only a pathetic 8% beat the index during the second five-year period.

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Su market timing (predicting the future) Toronto Stock Exchange (TS£), 24, 135 Toronto Stock Exchange 300 (TSE 300), 113 trailcr fees, 60 Su also costs and fees, IOvesdng Trueman, Bren, 157 trusteeship, standards for, 99-101,138,168 trusts, income, 134-35, 169 Trzcinka, Charles, 151 Tufano, Peter, 149-50 Unconventional5uC(m (Swensen), 108, 182 universities, as Smart Investors, 106, 108 U.S. se<:urities industry, in Canada, 119, 152 U.S. stocks barriers to Canadian investors in, 119, 160 in index funds, 19 value stocks, 84-87, 114 Vanguard 500 Index Fund, 45 Vanguard Group, 89 Want, Liping, 169 Warywoda, Mark, 160 websites for Index Funds Advisors, 182 for this book, 124 Weinberg, Neil, 81 Weiss Ratings, Inc., 155 What Kind ofan Investor Art' You? (Deaves), 150--51, 162, l SI Wheeler, Daniel M., 91 WiUis, Andrew, 167 world stocks. &t'international srocks wrap accounts, 65--66, 161 Wynne, Harold, 153-54 Yacktman, Donald, 145 Yale University endowment fund, 108 Zensche, D irk, 134, 169 

Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism
by Jeff Gramm
Published 23 Feb 2016

It is up to the unaligned shareholders of this company to decide what the future is. There is no middle ground. Our slate is composed of outstanding individuals. Burt Malkiel is just the kind of director shareholders should want. He is a former member of the Council of Economic Advisors, a long-standing full professor of Economics at Princeton and a trustee of various Vanguard funds. Bart Goodwin is a quality investor in private equity companies. Both of these gentlemen were directors of BKF before our money management firm merged into it in 1996. They are as independent as directors can be. Vote the white card. ON JUNE 23, BKF Capital Group shareholders elected Steel Partners’ slate of directors by a two-to-one margin.48 Chairman John A.

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It is up to the unaligned shareholders of this company to decide what the future is. There is no middle ground. Our slate is composed of outstanding individuals. Burt Malkiel is just the kind of director shareholders should want. He is a former member of the Council of Economic Advisors, a long-standing full professor of Economics at Princeton and a trustee of various Vanguard funds. Bart Goodwin is a quality investor in private equity companies. Both of these gentlemen were directors of BKF before our money management firm merged into it in 1996. They are as independent as directors can be. Vote the white card. Sincerely, /s/ JOHN A. LEVIN -------------------------------------- John A.

Your Money: The Missing Manual
by J.D. Roth
Published 18 Mar 2010

You can read more about lifecycle funds in this New York Times article: http://tinyurl.com/NYT-tdfunds. All-in-one funds If you like the idea of investing in just one fund but you don't want its asset allocation to change over time, you have a handful of other single-fund options, including: Vanguard STAR Fund (VGSTX), a collection of 11 other Vanguard mutual funds. The STAR fund is 45% U.S. stocks, 15% foreign stocks, 35% bonds, and 5% cash. (Investing in cash means putting money into things like money market accounts and CDs, which you learned about in Chapter 7.) This is a great fund to start with because you can invest as little as $1,000 into it (some funds have much higher initial investments).

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To learn more about the subtle differences between index funds and ETFs, head to http://tinyurl.com/YH-etfs. In Unconventional Success: A Fundamental Approach to Personal Investment (Free Press, 2005), David Swensen writes, "Fully 95% of active investors lose to the passive alternative, dropping 3.8% per annum to the Vanguard 500 Index Fund results." In other words, people who own index funds have typically earned almost 4% more each year than those who own actively managed funds. (This long article offers a good summary of the arguments for using index funds: http://tinyurl.com/dowie-index.) By owning index funds, you can beat the returns of nearly everyone you know.

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The Coffeehouse Portfolio by Bill Schultheis Bill Schultheis, the author of The New Coffeehouse Investor (Portfolio, 2009), believes that the secret to financial success is mastering the basics: saving, asset allocation, and matching the market. He says you can match the market with this lazy portfolio: 40% Vanguard Total Bond Index (VBMFX) 10% Vanguard 500 Index Fund (VFINX) 10% Vanguard Value Index (VIVAX) 10% Vanguard Total International Stock Index (VGSTX) 10% Vanguard REIT Index (VGSIX) 10% Vanguard Small-Cap Value Index (VISVX) 10% Vanguard Small-Cap Index (NAESX) To read more about The Coffeehouse Portfolio, head to http://tinyurl.com/LP-coffee.

Choose Yourself!
by James Altucher
Published 14 Sep 2013

Everything I’ve said so far in this chapter might suggest that I like John Bogle’s approach. John Bogle is a hero for many in the investment community. He is the founder of the Vanguard funds, which charge super-low fees to be fairer to the investor. This is not such a bad approach. However, you still often have to pay fees to the bank to buy into his funds. There’s still an annual fee (albeit very low) and there’s till this nonsense about lending out their shares so people can short the stocks they own (to be fair, I don’t know if Vanguard does this but many funds like Vanguard do). Again, I’m not saying “do” or “don’t” (yet). But I will tell you exactly what I do with almost all of the shares I own.

A Mathematician Plays the Stock Market
by John Allen Paulos
Published 1 Jan 2003

Efficient market theorists tend to believe in passive investments such as broad-gauged index funds, which attempt to track a given market index such as the S&P 500. John Bogle, the crusading founder of Vanguard and presumably a believer in efficient markets, was the first to offer such a fund to the general investing public. His Vanguard 500 fund is unmanaged, offers broad diversification and very low fees, and generally beats the more expensive, managed funds. Investing in it does have a cost, however: One must give up the fantasy of a perspicacious gunslinger/investor outwitting the market. And why do such theorists believe the market to be efficient?

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To the extent that they don’t, they’re tantamount to forecasting coin flips. Whatever your views on the subject, the arguments for an efficient market spelled out in Burton Malkiel’s A Random Walk Down Wall Street and elsewhere can’t be grossly wrong. After all, most mutual fund managers continue to generate average gains less than those of, say, the Vanguard Index 500 fund. (This has always seemed to me a rather scandalous fact.) There is other evidence for a fairly efficient market as well. There are few opportunities for risk-free money-making or arbitrage, prices seem to adjust rapidly in response to news, and the autocorrelation of the stock prices from day to day, week to week, month to month, and year to year is small (albeit not zero).

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getting what you pay for insider trading and overvaluation price anomalies that lead to predictability price targets of selecting. see stock-picking uniformity of positive ratings value stocks Stocks for the Long Run (Siegel) stop-loss orders strike prices, of stock options subterranean information processing support levels survivorship bias Taleb, Nassim taxes, progressive technical analysis blackjack strategies as parallel to Elliott wave theory illusion of control created by moving averages as predictor of stock prices vs. random-walk theory resistance and support levels sequence complexity and trading rules and trends and predictability telecommunications industry Thaler, Richard on calendar effects contrarian anomalies in stock studies of on counter-productive behavior notion of mental accounts thinly traded stocks pump and dump strategy and shorting and distorting strategy time saving, heuristic rules for Titman, Sheridan traders. see also investors “blow up” and becoming “ghosts,” irrational interactions between technical traders and value traders Wolfram model of interactions between trading strategies. see also investment strategies; predictability, of stock market buy-sell rules complexity of data mining and market predictions and role of chance in technical traders vs. value traders treasury bills trend analysis. see also technical analysis Tversky, Amos ultimatum games undervalued stocks, lists of unemployment United Nations UUNet division, WorldCom (WCOM) value investing. see also fundamental analysis accounting practices and better returns than with growth investing contrarian basis of contrasted with growth investing risk and value stocks Vanguard 500 fund variance from mean as measure of risk portfolio volatility and volatility Beta (B) values and diversification and measuring with standard deviation online trading and options prices and resistance and support levels and stock market stocks treasury bills Wall Street. see also stock markets European market causing reaction on variety of influences effecting Wall Street Journal Warner, Kurt Web. see Internet Weill, Sanford whim. see also chance windfall money The Winner’s Curse (Thaler) Wolff, Alexander Wolff, Edward Wolfram, Stephen World Class Options Market Maker (WCOMM) world markets, liquidity in World Trade Center WorldCom (WCOM) acquisitions by anchoring to fifty-two-week high attempts to help out board game buying more as price drops decision to sell emotions dictating increased investment in guilt and despair over losses impact of Ebbers sell-off infatuation with margin calls on moving averages and purchase of Digex as example of “losing through winning,” recommended as strong buy in 1990s UUNet division Yahoo!

Big Mistakes: The Best Investors and Their Worst Investments
by Michael Batnick
Published 21 May 2018

Nassim Taleb, Fooled by Randomness (New York: Random House, 2004), 242. 25. Jim Cramer, “Einstein Has Left the Building,” TheStreet.com, September 3, 1998. CHAPTER 5 Jack Bogle Find What Works for You Sometimes in life, we make the greatest forward progress by going backward. —Jack Bogle The Vanguard 500 Index fund is the world's largest mutual fund, with $292 billion in assets. That's 292 followed by nine zeros. How do you get to be so gigantic? Start with $11 million and grow 29% per year for the past 40 years. To give you an idea of how much money $292 billion is, if you were to stack it in hundred dollar bills, it would stretch 198 miles, which is just about the round‐trip distance from New York City to Vanguard's headquarters in Valley Forge, Pennsylvania.

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If you're still on your journey, keep searching. Notes 1. Credit Suisse, “Looking for Easy Games,” January 4, 2017. 2. Morningstar, “Recommendations for Fund Companies Not Named Vanguard,” December 27, 2016. 3. John C. Bogle, “The Professor, the Student, and the Index Fund,” johncbogle.com, September 4, 2011. 4. Vanguard, “Reflections on Wellington Fund's 75th Birthday,” 2006. 5. Ibid. 6. Adam Smith, Supermoney, foreword by John C. Bogle (Hoboken, NJ: Wiley, 2007). 7. John C. Bogle, The Clash of the Cultures (Hoboken, NJ: Wiley, 2012). 8. Institutional Investor, “The Whiz Kids Take Over,” January 1968. 9. Bogle, The Clash of the Cultures, 262. 10.

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Ibid. 15. Bogle, The Clash of the Cultures, 272. 16. Smith. 17. Ibid. 18. Quoted in John C. Bogle, “Lightning Strikes,” Institutional Investor 40, no. 5 (Special 40th Anniversary Issue, 2014): 42–59. 19. Bogle, The Clash of the Cultures, 278. 20. Ibid. 21. Ali Masarwah. “Indexing, Vanguard Drove Global Fund Flows,” Morningstar.com, February 4, 2017. CHAPTER 6 Michael Steinhardt Stay in Your Lane Investors who confine themselves to what they know, as difficult as that may be, have a considerable advantage over everyone else. —Seth Klarman Making money in the markets is challenging even when you have a deep understanding of what it is that you're doing.

MONEY Master the Game: 7 Simple Steps to Financial Freedom
by Tony Robbins
Published 18 Nov 2014

When Jack Bogle founded the Vanguard Group in 1974, index funds were just an academic theory. But Bogle was willing to bet his company on the idea that low-cost, low-fee mutual funds that tracked the performance of the whole stock market would outperform most managed funds year after year. Why? Because investors as a group can’t beat the market, because they are the market. Talk about a disrupter! At first, his index funds were mocked as “Bogle’s Folly.” A competitor even called the idea un-American. But Bogle brushed off his critics and went on to build Vanguard into the largest mutual fund management firm in the world, with $2.86 trillion in assets under management.

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It was the most provocative, probing interview of my long career, a reaction shared, I’m sure, by the other souls with strong investment values and sharp financial minds who populate this fine book. This book will enlighten you and reinforce your understanding of how to master the money game and, in the long run, earn your financial freedom.” —John C. Bogle, founder, the Vanguard Group and the Vanguard index funds, #1 largest mutual funds in the world “This book is not the typical financial book in any way. It is packed with wisdom and vital philosophies to enrich your life. A lot of books out there have more sizzle than steak to offer. Tony’s is different. This book will change your life.” —Dr. David Babbel, professor of finance, Wharton School of the University of Pennsylvania “In this book, Tony masterfully weaves anecdote and expertise to simplify the process of investing for readers—priming their financial education and helping them effectively plan for their future.”

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For example, you can “own” the entire market (let’s say all 500 stocks in the S&P 500) for as little as 0.14%—or as the investment world calls it, 14 basis points (bps). That’s just 14 cents for every $100 you invest. (Just a quick FYI for you insiders: there are 100 basis points in 1%, so 50 basis points is 0.5% and so on.) Owning the entire market is accomplished through a low-cost index fund such as those offered through Vanguard or Dimensional Fund Advisors. And we already know that owning the market beats 96% of all the mutual fund “stock pickers” over a sustained period. Sure, you might be willing to pay 3% to an extraordinary hedge fund manager like Ray Dalio, who has a 21% annualized return (before fees) since launching his fund!

Work Optional: Retire Early the Non-Penny-Pinching Way
by Tanja Hester
Published 12 Feb 2019

Therefore, index funds are passively managed, and instead of being constantly tweaked to maximize gains, fund managers simply buy shares of the stocks and bonds included in the index they are seeking to mirror, in proportion to the shares in the index, and then sit back and let the magic of compounding happen. That passive management means that investors pay minuscule management fees in relation to actively managed funds, often under 0.25% per year. Some of the broad market index funds with the lowest fees are the Schwab US Broad Market Fund, iShares Core S&P Total US Stock Market Fund, Vanguard Total Stock Market Fund, Fidelity Spartan 500 Index Fund, and a range of other funds with Vanguard, Fidelity, USAA, and T. Rowe Price, all of which have total expense ratios under 0.4%. But even those small percentage differences affect how much magic money you generate from your invested assets, so pay attention to fees even with index funds.

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Your goal is to invest for the long term, investing on schedule no matter what the markets are doing, and then keeping your hands off of it until you begin living off your magic money sources. As to where you invest it, that’s up to you, but choosing one or two diversified stock funds and one or two diversified bond funds will keep you well covered. Some favorites of financial experts and early retirees are the Vanguard Total Stock Market Index Fund (VTSMX or VTSAX) and Total Bond Market Index Fund (VBMFX or VBTLX), S&P 500 index funds like the Fidelity Spartan 500 fund, and other index funds with extremely low fees. Because these funds already invest in a broad swath of the stock and bond markets, you don’t have to worry about choosing the right mix of assets to insulate you from risk and expose you to growth opportunities.

Investing Demystified: How to Invest Without Speculation and Sleepless Nights
by Lars Kroijer
Published 5 Sep 2013

The right product for you is really an individual choice dependent partly on your tax and currency situation. But the key facts are the same. Buy as broad an index tracker as you can and as cheaply as you can. If you do that, you are doing pretty well. 1 At the time of writing, in the UK the only way to buy the Vanguard funds below £100,000 is through Alliance Trust. Vanguard has been making noises about introducing easier and more direct options. 2 See The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk by William Bernstein (American Media International LLC, 2004). part four Other things to think about chapter 15 * * * Pension and insurance For many individuals their investing lives are dominated less by issues relating to their rational portfolio, but rather by the options and choices with regard to pensions, life annuities and related products.

The Big Secret for the Small Investor: A New Route to Long-Term Investment Success
by Joel Greenblatt
Published 11 Apr 2011

A reasonable expectation for outperformance over market-cap-weighted indexes is approximately 2 percent per year over the very long term. iShares Russell 1000 Value Index Fund (symbol: IWD)—larger stocks iShares Russell 2000 Value Index Fund (symbol: IWN)—smaller stocks iShares Russell Midcap Value Index Fund (symbol: IWS) iShares Russell Small Cap Value Index Fund (symbol: IJS) Vanguard Value ETF (symbol: VTV) Vanguard Mid-Cap Value Index Fund (symbol: VOE) Vanguard Small-Cap Value ETF: (symbol: VBR) INTERNATIONAL VALUE INDEX ETF iShares MSCI EAFE Value Index Fund (symbol: EFV)—based on EAFE International Value Index MUTUAL FUNDS (“VALUE-WEIGHTED”) We have created a free website, valueweightedindex.com, to keep readers updated on what I believe will be a growing area in the investment field.

Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present
by Jeff Madrick
Published 11 Jun 2012

Kickbacks and payoffs contributed to the stock market bubble. But after the 2000 crash, nearly all the thousands of IPOs issued in the late 1990s had fallen to below their initial offering prices. Half of the ones that hadn’t gone out of business were selling for less than $1 a share. John Bogle, who had founded Vanguard Funds, estimated that the top executives of both old-line and newly public companies earned in total $1 trillion when they sold their shares during the bull market of the late 1990s. Fees and commission payments to investment banks, brokers, and mutual funds totaled another $1.275 trillion, he figured.

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Jay Tennessee Valley Authority (TVA) term trusts Thailand, 14.1, 15.1 Thatcher, Margaret Theory X Theory Y Tiger Fund, 15.1, 15.2 Time Inc, 8.1, 8.2 Time Warner, 8.1, 8.2, 12.1 Time Warner Cable Tisch, Laurence, 8.1, 15.1 Tobin, James, 2.1, 19.1 Townsend-Greenspan, 14.1, 14.2 Toyota, 12.1, 12.2 tranches, mortgage, 18.1, 19.1, 19.2, 19.3, 19.4 transportation infrastructure, prl.1, prl.2, 1.1, 2.1, 9.1, 9.2, 14.1, 14.2, 19.1, 19.2 Travelers Insurance, 15.1, 15.2, 16.1 Treasury, British, 2.1, 15.1, 15.2 Treasury bills, 1.1, 1.2, 2.1, 6.1, 6.2, 6.3, 9.1, 9.2, 9.3, 9.4, 9.5, 11.1, 14.1, 14.2, 15.1, 15.2, 15.3, 18.1, 18.2, 18.3, 19.1, 19.2, 19.3, 19.4, 19.5, 19.6, 19.7 Treasury Department, U.S., 2.1, 2.2, 3.1, 3.2, 6.1, 6.2, 6.3, 9.1, 11.1, 11.2, 14.1, 14.2, 14.3, 15.1, 15.2, 16.1, 16.2, 19.1, 19.2, 19.3, 19.4, 19.5 Troubled Asset Relief Program (TARP), 19.1, 19.2, 19.3, 19.4 Truman, Harry S., prl.1, prl.2, 7.1 Trump, Donald Tsai, Gerald Tudor Investment Tunney, John, 7.1, 7.2 Turner, Ed Turner, Ted, 8.1, 8.2, 8.3, 8.4, 8.5, 13.1 Turner Broadcasting Network (TNT), 8.1, 8.2, 8.3 Tuttle, Holmes Twentieth Century Fox, 7.1, 8.1, 8.2 Two Lucky People (Friedman and Friedman), 2.1 Tyco, 17.1, 17.2 Tynan, Kenneth UBS, 19.1, 19.2, 19.3, 19.4 Uhler, James Carvel, prl.1, prl.2 Uhler, Lewis, ix–x, prl.1, prl.2, 2.1, 7.1, 7.2 underwriters, 1.1, 6.1, 13.1, 13.2, 16.1, 16.2, 16.3, 17.1, 17.2, 17.3, 17.4, 17.5, 17.6, 17.7, 18.1, 19.1 unemployment insurance, 2.1, 2.2, 7.1 unemployment rate, prl.1, 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 3.1, 3.2, 4.1, 6.1, 8.1, 8.2, 9.1, 9.2, 9.3, 9.4, 9.5, 10.1, 11.1, 11.2, 11.3, 11.4, 12.1, 12.2, 12.3, 14.1, 14.2, 14.3, 14.4, 14.5, 17.1, 19.1, 19.2, 19.3, 19.4, 19.5, 19.6 United Technologies, 4.1, 5.1 Unruh, Jesse Updike, John uranium, 4.1, 5.1, 14.1 Utah International, 4.1, 5.1, 5.2, 12.1, 12.2 Value at Risk (VAR), 15.1, 15.2, 15.3, 15.4, 15.5, 17.1, 17.2 Vanguard Funds Van Horn, Rob Versailles, Treaty of (1919) Veterans Administration (VA), 18.1, 18.2 Viacom, 8.1, 16.1 Vietnam War, prl.1, 1.1, 2.1, 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 7.1, 10.1, 12.1, 19.1 Vilar, Alberto Viner, Jacob, 2.1, 2.2 Vinson & Elkins Volcker, Paul, 11.1, 11.2; background of, 3.1, 6.1, 11.3; in Carter administration, 11.4, 11.5, 11.6; as Federal Reserve chairman, itr.1, 6.2, 6.3, 6.4, 9.1, 9.2, 11.7, 13.1, 13.2, 13.3, 14.1, 15.1, 18.1, 19.1, 19.2; Greenspan compared with, 14.2, 14.3, 14.4, 14.5, 14.6; inflation policy of, 6.5, 6.6, 6.7, 6.8, 9.3, 11.8, 11.9, 11.10, 11.11, 11.12, 11.13, 11.14, 11.15, 11.16, 11.17, 14.7, 14.8; interest rates policy of, 6.9, 6.10, 9.4, 11.18, 11.19, 11.20, 11.21, 11.22, 15.2, 18.2, 18.3; in Reagan administration, 11.23, 11.24, 11.25; tax policy of, 11.26, 11.27, 11.28; as Treasury undersecretary, 3.2, 3.3, 6.11, 6.12, 6.13, 9.5, 9.6; unemployment rate and, 11.29, 11.30 Voorhis, Jerry Vranos, Michael, 12.1, 18.1 Wachtel, Paul wage controls, 2.1, 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 14.1 wage levels, itr.1, prl.1, prl.2, prl.3, 1.1, 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 4.1, 4.2, 8.1, 8.2, 9.1, 9.2, 9.3, 10.1, 10.2, 11.1, 11.2, 11.3, 11.4, 11.5, 12.1, 12.2, 13.1, 14.1, 14.2, 14.3, 16.1, 17.1, 17.2, 19.1, 19.2 Walker, Charls Wall, Danny Wallace, George Wallich, Henry Wall Street, x, 1.1, 1.2, 1.3, 1.4, 3.1, 4.1, 6.1, 8.1, 8.2, 8.3, 9.1, 9.2, 9.3, 11.1, 12.1, 12.2, 12.3, 12.4, 13.1, 13.2, 13.3, 13.4, 13.5, 14.1, 14.2, 14.3, 14.4, 14.5, 15.1, 15.2, 15.3, 15.4, 15.5, 15.6, 16.1, 16.2, 16.3, 16.4, 16.5, 16.6, 17.1, 17.2, 18.1, 19.1, 19.2, 19.3, 19.4, 19.5, 19.6, 19.7, 19.8, 19.9, 19.10, 19.11, 19.12, 19.13, 19.14 Wall Street Journal, 2.1, 6.1, 16.1, 16.2, 17.1, 17.2 Wal-Mart, 8.1, 8.2 Walras, Léon Walters, Barbara Walton, Bud Walton, Sam, 8.1, 8.2, 12.1 Warner, Douglas, III Warner-Amex Cable, 8.1, 8.2 Warner Bros., 7.1, 8.1, 8.2 Warner Bros.

Personal Investing: The Missing Manual
by Bonnie Biafore , Amy E. Buttell and Carol Fabbri
Published 24 May 2010

You don’t pay commissions on purchases, just the expense ratio. 2. Set up an automatic deposit for the first asset class. Take the amount you contribute toward your goal each month, and multiply it by the percentage for the first asset class. Set up an automatic deposit for that amount for the index fund that represents the asset class, such as the Vanguard 500 Index Fund for large company stocks. Automatic deposits are the ultimate in laziness, because you set them up and let them rip. (You can adjust them later on, if necessary.) Automatic deposits also help you succeed by regularly contributing to your plan through thick and thin, good times and bad, high prices and low (read about dollar-cost averaging on page 4). 3.

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See also mutual funds Adams, Bob (company financial status analysis tool by), 112 adjusted funds from operations (AFFO), 147 age, as asset allocation guideline, 164 aging parents, caring for, 24, 34–35 anchoring, 44 back-end loads, 92 bad habits in investing, 45–52 balance sheet, 106–108 Bankrate Credit Card calculator, 41 bankruptcy of company, 58, 59 basis points for bonds, 137 Bernstein, William (author), 168 bid price of bonds, 139 blend funds, 78, 79 Bogle, John (founder of Vanguard Group, Inc.), 168 bond funds, 78, 81–82, 130 bonds, 58–59, 129–138 average life of, 137 basis points for, 137 buying, 138–140 call provisions of, 134 capital gains from, 59, 128, 130 compared to bond funds, 130 credit quality of, 131–133 current yield of, 137 in default, 131 diversifying, 140 high-yield (speculative) bonds, 132, 159 interest paid by, 58–59, 63, 128, 135 interest rate (coupon rate) for, 128, 129, 133, 134–135 interest rate risk, 138, 159 investment grade, 132 maturity of, 58, 129, 133–134 price of, 59, 136–137, 139 prospectus for, 132 reasons to invest in, 128 returns from, 156–157 reviewing, 170 risk of, 59, 131 secured bonds, 131 senior bonds, 132 subordinated bonds, 132 tax issues regarding, 63, 69, 130 unsecured bonds, 131 yield to maturity, 137 books by Bogle, John (founder of Vanguard Group, Inc.), 168 Buying a Home: The Missing Manual (O’Reilly), 40 The Intelligent Asset Allocator (McGraw-Hill), 168 Unconventional Success (Free Press), 169 Your Money: The Missing Manual (O’Reilly), 40 Bringing It All Together worksheet, 37 bucket list.

DIY Investor: How to Take Control of Your Investments & Plan for a Financially Secure Future
by Andy Bell
Published 12 Sep 2013

Cost The number one attraction of ETFs and their kind is their low cost, making them a perfect way for the cost-conscious DIY investor to get access to equity and other markets. Costs are very low indeed. It is not only the giant US Spider ETF that has got a total expense ratio of 0.1 per cent. These ultra-low charges are available for UK markets too. Vanguard offers a FTSE 100 with a total expense ratio of 0.1 per cent. Some physical-backed ETFs, like the Vanguard fund, charge an explicit 0.5 per cent initial charge to cover the cost of stamp duty paid by the fund. The impact of your investment platform’s costs on the total cost of ETF investing The arrival of ultra-low-cost ETF managers in the UK has caused a bit of a stir in investment platforms. With the ETF’s annual management charge having no loading for a payment to investment platforms, or indeed advisers, ETFs truly are cleanly and keenly priced.

The Innovation Illusion: How So Little Is Created by So Many Working So Hard
by Fredrik Erixon and Bjorn Weigel
Published 3 Oct 2016

The biggest direct holder of floated stock in GE had collected merely 1.9 million shares, which can be compared to Vanguard Group’s 566 million. To know who owns General Electric it is necessary, as a first step, to ask: who owns the Vanguard Group? That turns out to be the wrong question, because the Vanguard Group is not investing its own money. It just represents Vanguard’s different funds, and the company, which pioneered the market for mutual index funds, operates – like other funds – on a principle of diversified allocation of capital. Hence, Vanguard does not necessarily hold GE stocks because it has an idea for how to make a successful company even more successful, despite being an asset manager that is a more active owner than many other asset managers.

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It is impossible to say, of course, but quite a number of them are not direct savers – they are beneficiaries of employers and others that have invested in pension plans. Even if we took the stairs down to the mezzanine or ground floor of savers, the group would be too large to ask what they want to do with their intermediated ownership of GE. It seems safe to say, however, that they are not putting their savings in Vanguard funds because they want an ownership role in GE. If it is impossible to know the identity of the owners, it is equally impossible to know what the owners want. When companies are principally owned and controlled by owners whose agendas are, at best, arcane, capitalism turns gray. Most people do not acknowledge there is a problem in obscure and gray ownership.

The Little Book of Hedge Funds
by Anthony Scaramucci
Published 30 Apr 2012

Anson, The Handbook of Alternative Assets (Hoboken, NJ: John Wiley & Sons, 2006), 123. Chapter One What Is a Hedge Fund? The Traditional Long-Only Portfolio versus the Alternative Hedge Fund Portfolio Hedge funds are generally perceived to be the investment of choice of the rich and the informed, and they are more interesting and fun to discuss than your Vanguard index fund. —Cliff Asness, AQR Capital Management The year was 1989. I had just started working at Goldman Sachs in the world of investment banking—the industry adored by many Ivy League students and business school graduates. A few floors up, legendary research director Lee Cooperman was asked by Goldman Sachs to create a mutual fund and lead the Asset Management Division.

The Connected Company
by Dave Gray and Thomas Vander Wal
Published 2 Dec 2014

HATED COMPANIES “The most hated companies, and the most hated industries, are service providers.” From “Banks, Utilities, Telecoms Top Most Hated Companies List,” by Jason Chupick, PRNewser, October 14, 2011, http://www.mediabistro.com/prnewser/banks-utilities-telecoms-top-most-hated-companies-list_b28712. VANGUARD Vanguard Mutual Funds information based on interviews conducted by the author, 2011. Chapter 5. How companies lose touch Your most unhappy customers are your greatest source of learning. — Bill Microsoft Gates Companies tend to lose touch with customers as they grow, for a variety of reasons. Companies must find ways to create, maintain, and develop deep connections as they grow.

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Think about the information available to Whole Foods employees on demand: they can look up any store on the platform and see the best-selling items in the store. They can rank stores by sales, growth, or profitability. If they want to look for the best cutting-edge practices, they know exactly where to look and whom to talk to. To maintain a shared awareness of customer issues and concerns, Vanguard Mutual Funds collects customer feedback through multiple channels like surveys, focus groups, comments on the website, customers conversations with phone associates, and so on. The customer feedback is aggregated and published to the entire company in a daily email called Voice of the Client (or VOC for short), so everyone can see the actual things that customers are saying, in their own words, on a daily basis.

The Founders: The Story of Paypal and the Entrepreneurs Who Shaped Silicon Valley
by Jimmy Soni
Published 22 Feb 2022

Musk also took the opportunity to contrast X.com with its competition. He maligned two online banking competitors—Wingspan Bank and Telebanc Financial Corp—as weak on the technology side. Then he set his sights on a storied industry player: the Vanguard Group. Asked how X.com’s investment pricing would compete with the famously price-efficient Vanguard funds, Musk replied, “We will not be undercut by anyone, period.” Narratives like Musk’s played well in the media, successfully tapping the public’s perennial interest in underdog stories. But Musk also had a special knack for capturing the press’s attention. He discovered that his willingness to veer into exaggeration often did the trick; X.com wasn’t even in existence yet, and it was already earning breathless press mentions.

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weak on the technology side: “Zip2 Founder Launches 2nd Firm: Readies Financial Supersite,” Computer Business Review, August 29, 1999, https://techmonitor.ai/techonology/zip2_founder_launches_2nd_firm_readies_financial_supersite. “We will not be undercut”: John Hechinger and Pui-Wing Tam, “Vanguard’s Index Funds Attract Many Imitators,” Wall Street Journal, November 12, 1999, https://www.wsj.com/articles/SB942358046539516245?st=jjzy7eh1f8w5jwp&reflink=mobilewebshare_permalink. “poised to become”: Mark Gimein, “Fast Track,” Salon.com, August 17, 1999, https://www.salon.com/1999/08/17/elon_musk/. “Elon was ready”: Author interview with Colin Catlan, April 5, 2019.

The Invisible Hands: Top Hedge Fund Traders on Bubbles, Crashes, and Real Money
by Steven Drobny
Published 18 Mar 2010

If Protégé wins, the money is to be given to Absolute Return for Kids (ARK), an international philanthropy based in London. If Buffett wins, the intended recipient is Girls Inc. of Omaha. To see more information about the bet, go to www.longbets.org. During the course of 2008, the Vanguard S&P 500 fund was down 37 percent and on average (net of all fees, costs, and expenses) the five funds-of-funds selected by Protégé were down 23.9 percent. At year-end 2009, the Vanguard 500 Index Fund’s (VFINX) return was 26.5 percent while the HFRI Fund of Funds Composite Index (a proxy for the five funds-of-hedge-funds) was up 11.2 percent for the year. After two years of performance, the approximate BAV (Bet Asset Value) is: Protégé 84.6; Buffett 79.7.

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Stocks versus Hedge Funds In the fall of 2007, Warren Buffett and Protégé Partners, a money management firm that runs funds-of-hedge funds, placed a bet on the following question: Will a representative collection of hedge funds, selected by experts, return more to investors over the next 10 years than the return on the S&P 500? Protégé bet on the performance of five funds-of-hedge funds—specifically, the averaged returns that those vehicles deliver net of all fees, costs, and expenses. Buffett bet on the performance of the Vanguard S&P 500 Admiral Fund. The time frame is January 1, 2008 to December 31, 2017. Each side committed roughly $320,000. The total funds of about $640,000 were used to buy a zero-coupon Treasury bond that will deliver $1 million at the bet’s conclusion, which will be given to charity regardless of who wins. If Protégé wins, the money is to be given to Absolute Return for Kids (ARK), an international philanthropy based in London.

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Treasuries investment purchase worthlessness U.S. Treasury bonds (1987-1988) markets, protest Notes Valuation examination importance Valuation-driven tactical asset allocation models, time frame (increase) Value-at-Risk (VaR) calculation model Value-driven fundamental models, belief Vanguard 500 Index Funds (VFINX) return Vega, limits Venture capital opportunities, cash flow production Vision macro Visualization VIX, Fed funds (relationship) VIX Index (2007-2009) Volatility adjustment collapse dampening explanation usage Volcker, Paul Wages, transmission Washington State Investment Board West Texas Intermediate (WTI) crude World financial system, collapse World Trade Organization (WTO), China entry Wyatt, Watson Wynn, Steve credit bubble, recognition creditworthiness diversification perspective feedback, usage future correlations, usage historical correlations, usage interview lessons macro scenario, preparation money making ability multiple scenarios, tracking psychology, importance risk capital, reduction skill, recognition Swedish bond market, forward market introduction time horizon, alteration volatilities, usage Yale Asset Class, results Yale Endowment Investment Committee long-term investment popularity/usage Yale Model Yale University, endowments annual long-term performance control (Swensen) decline equity returns portfolio composition Yield curves, impact Zero-sum game, alpha extraction (relationship) Zimbabwe hyperinflation inflation/equities (2005-2008) market

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street
by Justin Fox
Published 29 May 2009

Then the magazine that had gotten him into the mutual fund business, Fortune, came through for him with a lengthy article by a recent graduate of the University of Rochester’s Business School, headlined “Index Funds—An Idea Whose Time Is Coming.”39 After that, the money flowed.40 Now it’s possible that the index fund would have been created even in the absence of these writings and of the efficient market hypothesis that helped inspire them. But it’s hard to see how. The work of ivory tower scholars had launched a new school of investing, one that would survive and flourish in the decades to come. It was one of the great practical triumphs in the history of the social sciences. AFTER THE LAUNCH OF THE Vanguard index fund, Paul Samuelson announced in his Newsweek column that he had celebrated the birth of his first grandson by buying the boy a few shares.41 Ben Graham, just before he died in 1976, offered his own endorsement. In a Q&A with Charley Ellis in the Financial Analysts Journal, Graham defended index funds against their detractors on Wall Street and said that, in some matters, he now considered himself “on the side of the ‘efficient market’ school of thought now generally accepted by the professors.”

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Unruh died in 1987, but Dale Hanson—hired away from Wisconsin’s state pension fund that year to run Calpers—proved a more than capable successor as a shareholder activist. Hanson saw that his potential allies weren’t just the other pension funds that belonged to the Council of Institutional Investors, but mutual fund companies such as Fidelity and Vanguard. The mutual funds had no interest in waging public battles with the corporations whose 401(k) business they were courting, but their burgeoning size (and in Vanguard’s case, its indexing bent) made it ever harder for them to bail out of underperforming companies. If Hanson wanted to raise a little hell, they weren’t averse to quietly supporting him.

file:///C:/Documents%20and%...
by vpavan

One of the collapsed Heartland funds called itself the Heartland Short Duration High-Yield Municipal Bond Fund. Investors may have been fooled by the term "municipal," which to many connotes safety and security. But few of Heartland's bonds were actually guaranteed by the government units that issued them. The Vanguard Short-Term Municipal Bond Fund has a similar name, but is invested in bonds guaranteed by local governments with high ratings. The industry has been engaged in a lengthy debate over whether the SEC should require more frequent disclosure of a fund's portfolio holdings. Currently, funds must reveal holdings twice a year in shareholder reports.

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When their broker recommends a fund, they don't know enough to ask: Are you suggesting this fund because your research shows it's the best investment for me, or because your firm is paid $1 million to push it? If your head is spinning from all of this, take the easiest and safest route and pick a low-cost index fund. Many Vanguard, Fidelity, and TIAA-CREF funds fit the criteria I outlined above. Vanguard, for example, has twenty-one no-load index funds to choose from. Start off with the boring but predictable returns of a broad-based index fund— one that tracks the S&P 500 or, to get exposure to the entire market, the Wilshire 5000— over the more alluring, but volatile, managed funds.

Finance and the Good Society
by Robert J. Shiller
Published 1 Jan 2012

If we are seeing the bursting of a bubble in investment manager compensation, we may see relatively lean times in coming years for people in this line of business. Anyone contemplating going into this line of work must take such considerations into mind. In his book Enough! True Measures of Money, Business, and Life, the founder of the Vanguard Funds, John C. Bogle, laments that many in the nancial community are milking society based on their false hopes of extraordinary pro ts. There must be some element of truth here, but the true magnitude of this “milking” is hard to pin down, as Bogle himself recognizes: “I know of not one academic study that has systematically attempted to calculate the value extracted by our nancial system from the returns earned by investors.”13 It will be just as hard to measure the bene t that the nancial community provides in improving the allocation of resources and incentives to achieve business success.

Competition Overdose: How Free Market Mythology Transformed Us From Citizen Kings to Market Servants
by Maurice E. Stucke and Ariel Ezrachi
Published 14 May 2020

Davenport, “The Anti-Goldman Culture,” Harvard Business Review, March 15, 2012, https://hbr.org/2012/03/the-anti-goldman-culture. 44.Liz Hoffman, “How Banks Lost the Battle for Power on Wall Street,” Wall Street Journal, September 7, 2018, https://www.wsj.com/articles/how-banks-lost-the-battle-for-power-on-wall-street-1536312634; Vanguard in the first seven months of 2017 attracted over $177.3 billion in investments, which was about as much as its ten closest competitors—combined. And the biggest losers were Goldman Sachs and the other scandal-ridden banks that lost their social purpose, like JPMorgan Chase & Co. and Wells Fargo & Co. Ryan Vlastelica, “Investors Flock to Vanguard Funds, Dump Goldman, Wells Fargo, and Others,” MarketWatch, July 12, 2017, https://on.mktw.net/2OomPvp. 45.One important foundation of this literature is the shared value initiative, led by Harvard Business Professor Michael Porter. https://www.sharedvalue.org/partners/thought-leaders/michael-e-porter. 46.Harvard Business Review Analytic Services, The Business Case for Purpose (2015), 1, https://hbr.org/resources/pdfs/comm/ey/19392HBRReportEY.pdf.

A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History
by Diana B. Henriques
Published 18 Sep 2017

Their endeavor, called “indexing,” outraged the traditional stock-picking analysts at the bank—and helped nurture the giant institutional investors who would rise to prominence in the next decade. Dubbed Wells Fargo Investment Advisors, this innovative team was road-testing index funds long before the Vanguard mutual fund family introduced the concept to the retail market in 1975. It also pioneered the statistical tools for measuring pension fund performance, a commonplace concept now that was unavailable to corporate treasurers five decades ago. The seeds of vast and potentially disruptive power were planted in these two innovations.

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House of Representatives Agriculture Committee Banking Committee Commerce Committee Energy and Commerce Committee Glass-Steagall hearings Penn Square and Silver Thursday hearings swaps and Ways and Means Committee U.S. Senate Agriculture Committee Banking Committee election of 1980 and SEC and U.S. trade representative University of California at Berkeley University of Chicago University of Minnesota Unruh, Jesse upstairs trading Value Line index futures Vanguard mutual fund family Volcker, Paul A. Boesky and Continental Illinois and Corrigan and deregulation and Drysdale default and Fed Board and financial crises and financial futures and foreign currency markets and Glass-Steagall and inflation and James Baker and later career of Ohio S&L crisis and Penn Square crisis and resignation of Silver Thursday and stock index futures and Volume Investors clearing firm Wall Street brokerage and securities firms.

The Myth of Capitalism: Monopolies and the Death of Competition
by Jonathan Tepper
Published 20 Nov 2018

José Azar, Martin Schmalz, and Isabel Tecu, “Why Common Ownership Creates Antitrust Risks,” CPI Antitrust Chronicle (June 2017). 13. Ibid. 14. https://www.forbes.com/sites/laurengensler/2017/02/25/warren-buffett-annual-letter-2016-passive-active-investing/#1bae82286bbd. 15. https://www.theatlas.com/charts/S1lPjxkM-. 16. https://www.nytimes.com/2017/04/14/business/mutfund/vanguard-mutual-index-funds-growth.html. 17. https://www.theatlantic.com/magazine/archive/2017/09/are-index-funds-evil/534183/?utm_source=twb. 18. National Bureau of Economic Research, “Explaining Low Investment Spending,” http://www.nber.org/digest/feb17/w22897.html. 19. https://www.theatlantic.com/business/archive/2017/06/how-companies-decide-ceo-pay/530127/. 20. https://www.mercurynews.com/2018/05/07/butler-who-do-stock-buy-backs-leave-behind/. 21. https://www.bloomberg.com/gadfly/articles/2018-03-05/five-charts-that-show-where-those-corporate-tax-savings-are-going. 22. https://www.brookings.edu/wp-content/uploads/2016/06/lazonick.pdf. 23.

The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness
by Morgan Housel
Published 7 Sep 2020

We invest money from every paycheck into these index funds—a combination of U.S. and international stocks. There’s no set goal—it’s just whatever is leftover after we spend. We max out retirement accounts in the same funds, and contribute to our kids’ 529 college savings plans. And that’s about it. Effectively all of our net worth is a house, a checking account, and some Vanguard index funds. It doesn’t need to be more complicated than that for us. I like it simple. One of my deeply held investing beliefs is that there is little correlation between investment effort and investment results. The reason is because the world is driven by tails—a few variables account for the majority of returns.

Hedgehogging
by Barton Biggs
Published 3 Jan 2005

However, let’s say you are retired, have $25 million of financial assets, and a working familiarity with investing.You figure that you need an income after taxes of between $400,000 and $500,000 a year to live in the style you’re accustomed to, and you have $150,000 of other income from your pension, social security, and so forth. So you put $5 million into a portfolio of high-grade, medium-term tax exempts, which gives you roughly $225,000. I would buy $2 million ($85,000 of pretax income) of 10-year Treasury bonds as a strategic reserve. Then, with the remaining $18 million, I would buy $5 to $7 million of Vanguard index equity funds.The remaining $10 to $13 million should go to either 5 to 10 hedge funds (if you can identify and follow that number) or a couple of funds of funds. The idea is bonds for income, equities for growth, and hedge funds for all seasons. Obviously, this is a simplistic model, and a lot depends on your level of income, expertise, and the competence of your financial adviser.

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Instead, right now in mid-2005, large caps are relatively attractive compared to small caps, and large-cap growth is relatively undervalued compared to large-cap value. The Leuthold large-cap growth index of 90 companies is selling at 20.5 times earnings and the Leuthold value index is at 11.9 times, which is a growth to value price earnings ratio of 1.68 versus the historical median of 2.5. For IRAs the Vanguard index funds make sense to me. Sure, you can capture alpha, extra return, if you identify a winner mutual fund, but you are bucking a number of headwinds in terms of higher costs, performance cycles, manager turnover, and so on. When the time comes and small value is cheap again, Vanguard has a Small-Cap Value Index Fund.The stock selection is based on the MSCI Index, which, in making its selection, uses eight value and growth factors including price/book value, dividend yield, earnings yield, sales growth, and longterm-earnings growth.

Red Moon Rising
by Matthew Brzezinski
Published 2 Jan 2007

It was juvenile and “preposterous,” he admitted in retrospect, but he couldn’t help himself. Unbeknownst to Medaris, there was a reason for the newfound secrecy; a third party also coveted the WS-117L: the CIA. Richard Bissell had been eyeing the project ever since he had started searching for a replacement for the U-2. He had helped fund Vanguard from his slush fund and tried to covertly buy the Itek Corporation, an optical research laboratory in Boston, which was working on recoverable cameras that could operate from outer space. In the summer of 1957, Bissell, Edwin Land, and James Killian had begun hatching a scheme with Schriever for the CIA to assume direct control over spy satellites, as it had done with spy planes.

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You want to put a ball in that rocket?”: Ibid., pp. 87-88. “We’re never going to make it”: Green and Lomask, Vanguard, p. 131. 228 “an unaccepted, incompletely developed vehicle”: Ibid., p. 177. “An astonishing piece of stupidity”: Time, October 21, 1957. the Stewart Committee had been “prejudiced”: Stehling, Project Vanguard, p. 60. 229 “the funds estimated by Secretary Quarles were totally inadequate”: Witkin, ed., The Challenge of the Sputniks, p. 21. Wilson interviewed by Mike Wallace: Ibid., p. 47. “Implicit in all the criticism”: Ambrose, Eisenhower, p. 457. a crack team of Wall Street lawyers: Robert A. Caro, Master of the Senate: The Years of Lyndon Johnson (New York: Alfred A.

Phishing for Phools: The Economics of Manipulation and Deception
by George A. Akerlof , Robert J. Shiller and Stanley B Resor Professor Of Economics Robert J Shiller
Published 21 Sep 2015

Halah Touryalai, “10 Wall Street Expenses That Make the SEC’s Budget Look Pathetic,” Forbes, February 17, 2011, accessed January 16, 2015, http://www.forbes.com/fdc/welcome_mjx.shtml. The same can be said of Citigroup’s expenditures for marketing and advertising: larger than the whole SEC budget. 19. Vanguard, “See the Difference Low-Cost Mutual Funds Can Make,” accessed January 7, 2015, https://investor.vanguard.com/mutual-funds/low-cost. 20. Edward Wyatt, “Judge Blocks Citigroup Settlement With S.E.C.,” New York Times, November 28, 2011, accessed June 10, 2015, http://www.nytimes.com/2011/11/29/business/judge-rejects-sec-accord-with-citi.html?pagewanted=all. 21. Jed S. Rakoff, “The Financial Crisis: Why Have No High-Level Executives Been Prosecuted?”

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Koeter, and Willem van den Brink. “Ranking the Harm of Alcohol, Tobacco and Illicit Drugs for the Individual and the Population.” European Addiction Research 16 (2010): 202–7. DOI:10.1159/000317249. Vanguard. “See the Difference Low-Cost Mutual Funds Can Make.” Accessed January 7, 2015. https://investor.vanguard.com/mutual-funds/low-cost. Veblen, Thorstein. The Theory of the Leisure Class: An Economic Study of the Evolution of Institutions. New York: Macmillan, 1899. Velotta, Richard N. “Gaming Commission Rejects Slot Machines at Cash Registers.” Las Vegas Sun, March 18, 2010. Last accessed May 12, 2015. http://lasvegassun.com/news/2010/mar/18/gaming-commission-rejects-slot-machines-cash-regis/?

Pound Foolish: Exposing the Dark Side of the Personal Finance Industry
by Helaine Olen
Published 27 Dec 2012

Over the years Quinn made numerous enemies, ranging from brokers to heads of mutual fund companies, for relentlessly putting the financial interests of the consumer ahead of the financial interests of the financial services industry. Quinn sees herself as both a part of the consumer movement and the personal finance and investment communities. She names as her contemporaries such financial pioneers as Bruce Bent, the creator of the now ubiquitous money market fund, and John Bogle, the force behind Vanguard’s low-cost index funds. Yet a look at Quinn’s work demonstrates both the promise and the perils of the financial advice arena. A quick run through the many, many profiles of her penned over the years shows howlers mixed in with the prescient comments, sometimes in the same piece, proving how hard it is to get this forecasting thing right.

Dead Companies Walking
by Scott Fearon
Published 10 Nov 2014

The great author and investor John Bogle—who invented the passive index fund back in the 1970s—examined the average returns of equity mutual funds from 1983 to 2003. A dollar invested in those kinds of funds in the early 1980s netted just $7.10 in profits twenty years later. Over the same period, a dollar invested in the S&P 500 index, which Bogle’s Vanguard 500 Fund tracks, would have brought in over $11.50.§ Think about those numbers for a second. The overseers of the Vanguard 500 merely invest in all the stocks of the S&P 500. Compare that to your average mutual fund, where you’ve got highly paid professional investors buying and selling individual stocks all day, every day.

Against the Gods: The Remarkable Story of Risk
by Peter L. Bernstein
Published 23 Aug 1996

Over the long run, active investment managers-investors who purport to be stock-pickers and whose portfolios differ in composition from the market as a whole-seem to lag behind market indexes like the S&P 500 or even broader indexes like the Wilshire 5000 or the Russell 3000. Over the past decade, for example, 78% of all actively managed equity funds underperformed the Vanguard Index 500 mutual fund, which tracks the unmanaged S&P 500 Composite; the data for earlier periods are not as clean, but the S&P has been a consistent winner over long periods of time. There is nothing new about this pattern. In 1933, Alfred Cowles, a wealthy investor and a brilliant amateur scholar, published a study covering a large number of printed financial services as well as every purchase and sale made over four years by twenty leading fire insurance companies.

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*Kahneman has described his introduction to experimentation when one of his professors told the story of a child being offered the choice between a small lollipop today or a larger lollipop tomorrow. The child's response to this simple question correlated with critical aspects of the child's life, such as family income, one or two parents present, and degree of trust. *An excellent review of this matter appears in "The Triumph of Indexing," a booklet published by the Vanguard Group of mutual funds in May 1995. This controversial subject receives more detailed treatment later in this chapter. *In a speech to the National Association of Realtors in May 1995, none other than the Chairman of the Federal Reserve Board, Alan Greenspan, confirmed the piggy bank metaphor: "It is hard to overestimate the importance of house price trends for consumer psyches and behavior....

The Enlightened Capitalists
by James O'Toole
Published 29 Dec 2018

But when corporate behavior is perceived as rapacious, narrowly self-interested, and insensitive to the needs of society, those citizens may demand radical changes to the system. The threat of radical change may be what led CEOs attending the 2018 Davos meeting into earnest discussion about social responsibility. There, the chairman of Wall Street’s Vanguard investment fund, Bill McNabb, called on his fellow executives to end their obsession with short-term profits and instead focus on addressing such major social problems as climate change and employee well-being. This came fast on the heels of a similar plea by Larry Fink, CEO of $6 trillion investment fund BlackRock, who had recently declared that “society is demanding that companies, both public and private, serve a social purpose . . . and benefit all their stakeholders.”

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Union Carbide, 173 United Airlines, 290–91, 411–12 United Auto Workers, 108 United Garment Workers of America (UGWA), 181 United Kingdom (UK) bathing habits and Lever, 51, 53 Bolton, 52, 56–57, 64 Brexit, 446 “British disease,” 215 changes to economic order proposed, xv chief executive salaries in, 469 child labor in, 22, 23 chocolate makers, 84 contingent workforces and virtual workplaces in, 474–75, 477 cooperative movement, 29, 415, 417, 418 corporate capitalism and profit primacy in, 438 effect of industrialization in, 4 eighteenth century working conditions, 8 exporting cloth, 4–5 finance and banking, public concern about misbehavior in, 467 Financial Reporting Council, 462 gender pay inequity and, 469 global warming concerns and enlightened business practices, 432 history of textile mills in, 3–4 John Lewis Partnership among largest retail chains, 120 labor unrest (1960s), 129 Manchester, 5, 6, 8–10, 11, 208 Marks & Spencer as dominant retailer, 211 middle class growth in, 432 no demand for socially responsible companies, 427 old-age pensions law, 59 social entrepreneurship and, 456 socialized medicine, 212 Stewardship Code, 462 tabloids, 61 welfare-state and, 129 See also Lewis, John Spedan; Lever, William; Owen, Robert; Roddick, Anita United States contingent workforces and virtual workplaces in, 473–75, 477 corporate capitalism and profit primacy in, 438 declines in productivity and job satisfaction, 476 Dodd-Frank legislation, 462 finance and banking, public concern about misbehavior in, 467 first stock exchanges, 47 Gilded Age, 31 global warming concerns and enlightened business practices, 432 large manufacturing facilities encouraged by Hamilton, 3–4 largest retail business, 41 middle class growth in, 432 new cooperatives in, 419 no demand for socially responsible companies, 427 public disclosure of top executive compensation required, 469 rioting in 1877 against capitalist practices, 31 social entrepreneurship and, 456 tax legislation prohibiting industrial foundations, 434–35 See also specific companies Universal Pictures, 473, 474 University of California Berkeley, 194 Hass School of Business, 182 Levi Strauss scholarships, 178, 182 “unmanagement,” 298–99, 304 UPS, 409–10 Up the Organization (Townsend), 279–80, 283, 285, 286, 287 US Steel, xxx, 249, 265 utilitarianism, 21, 27 utopian communities Google Alphabet’s Quayside, 450–51 Hershey and, 79 Owen’s New Harmony, 27–28, 44 Owen’s “villages of co-operation,” 26 Penney’s Penney Farms, 44–45 See also living conditions of workers Vagelos, Roy, 334–41, 427, 428, 436, 477 accomplishments, 341 background and personal life, 335 cure for river blindness and, 335–38, 339 decision to sell vaccine patent to China, 338 legacy of, 340–41 Merck and ethical business practices, 335–39 Merck retirement, 338–39 opposition to giving away Mectizan, 337 philanthropy of, 341 Regeneron Pharmaceuticals and, 341 Vanderbuilt, Cornelius, xxxiii Vandevelde, Luc, 221 Vanguard investment fund, xiv, 461 Victoria, Queen, 20 Vogel, David, 308, 429 “Two and a Half Cheers for Conscious Capitalism,” 454, 455–56 Volkswagen, 173, 429 Waddock, Sandra, 373–74 wages ACIPCO and, 138, 139 Avis and, 281 Ben & Jerry’s and, 384 British textile mills, 5 Carnegie’s philosophy on paying the minimum, xxxiii executive-employee wage gap, 469–72 Ford’s $5 a day, xxviii, 20, 113 Herman Miller and, 228–29, 232, 234 “iron law” of, 21 J&J and, 149–50, 157 labor costs vs. total labor costs and, 290–91 Levi Strauss and, 190 Lincoln Electric, 94–95, 98, 99–101 link between compensation and perception of fairness, 471 living wages, 85, 138, 139, 150, 154, 157, 401 Nucor, average yearly, 276 Owen’s philosophy and, 20, 21 Patagonia and, 401 proven methods of equitable compensation, 472 Scanlon plan, 228–29, 234, 472 SWA and, 290–91 well-paid workers and productivity, 157, 290–91 W.

Our Lives in Their Portfolios: Why Asset Managers Own the World
by Brett Chistophers
Published 25 Apr 2023

Over time, however, the homes in question became by degrees less part of asset-manager society, as Blackstone progressively sold down its shareholding and, eventually, ceded board control. In November 2019, Blackstone’s funds finally cashed out. This, of course, is not to say that asset managers do not hold Invitation Homes shares today. They do: all of the company’s biggest shareholders are asset managers, predictably led, at the time of this writing, by Vanguard (whose index funds collectively hold a stake of around 13 per cent) and BlackRock (with around 8 per cent). But with respect to Invitation Homes, these two managers are mutually independent, minority, and passive shareholders. They do not control the company – management does. If the company’s assets are operated in such a way as to privilege the interests of the company’s asset-manager shareholders, it is because management has decided it should be thus.

Principles of Corporate Finance
by Richard A. Brealey , Stewart C. Myers and Franklin Allen
Published 15 Feb 2014

See also Black-Scholes option pricing model warrant, 549–550 Valuation horizon, 94–95, 96, 485–487 Value additivity, 430, 881–882 conglomerate mergers and, 833–835 defined, 182 diversification and, 182 economic value added (EVA), 305–307, 725–726 Value at risk (VA), 601–602 Value Line, 85n Value maximization agency problem in, 12 as goal of corporation, 7–12, 16–17, 245–266 Value stocks, 203–204 Van Dijk, M. A., 330n Vanguard 500 Index Fund, 327–328 Vanguard Index Funds, 327–328, 361 Vanguard Total Stock Market index, 361 Variability, measuring, 170–171 Variable-rate demand notes (VRDNs), 795, 796 Variance defined, 167–168 in measuring portfolio risk, 167–170 portfolio, 167–170, 171–174 in portfolio theory, 193n Venture capital, 371–375, 377 market for, 373–375 stages of financing, 371–373 Vermaelen, T., 405n Veronesi, P., 383n Vertical mergers, 807, 809–810 Viacom, 387, 827 Viasys Health Care, 844 Villalonga, B., 849n Virgin Atlantic, 226 Virgin Group, 226 Vishny, R.

…

BEYOND THE PAGE ● ● ● ● ● Mutual fund cumulative returns brealey.mhhe.com/c13 BEYOND THE PAGE ● ● ● ● ● Mutual fund performance brealey.mhhe.com/c13 The evidence on efficient markets has convinced many professional and individual investors to give up pursuit of superior performance. They simply “buy the index,” which maximizes diversification and cuts costs to the bone. Individual investors can buy index funds, which are mutual funds that track stock market indexes. There is no active management, so costs are very low. For example, management fees for the Vanguard 500 Index Fund, which tracks the S&P 500 Index, were .17% per year in 2011 (.06% per year for investments over $10,000). The size of this fund was $102 billion. How far could indexing go? Not to 100%: If all investors hold index funds then nobody will be collecting information and prices will not respond to new information when it arrives.

…

If you want to invest in a closed-end fund, you cannot buy new shares from the fund; you must buy existing shares from another stockholder in the fund. BEYOND THE PAGE ● ● ● ● ● Exchange traded funds brealey.mhhe.com/c14 If you simply want low-cost diversification, one option is to buy a mutual fund that invests in all the stocks in a stock market index. For example, the Vanguard Index Fund holds all the stocks in the Standard & Poor’s Composite Index. An alternative is to invest in an exchange traded fund, or ETF, which is a portfolio of stocks that can be bought or sold in a single trade. These include Standard & Poor’s Depository Receipts (SPDRs, or “spiders”), which are portfolios matching Standard & Poor’s stock market indexes.

Capitalism Without Capital: The Rise of the Intangible Economy
by Jonathan Haskel and Stian Westlake
Published 7 Nov 2017

One of the odd things about venture capital is the persistence of strong performance among funds—that is to say, the fact that the best 25 percent of venture capital funds tend to be the same funds, year after year and even decade after decade. This is far from usual in financial markets. A recent UK study found in the mutual fund industry that the best-performing 20 percent of fund managers were among the worst performing 20 percent a year later (Vanguard 2015). Private equity funds show similar variability over time. But high-performing VC firms tend to do well in fund after fund year after year. One might think this is because venture capitalists are professional, highly remunerated people who are good at picking investments or at sitting on company boards.

…

“Depreciation in Production Accounts and in Income and Wealth Accounts: Resolution of an Old Debate.” Economic Inquiry 34 (1): 93–115. van Ark, Bart, Janet Hao, Carol Corrado, and Charles Hulten. 2009. “Measuring Intangible Capital and Its Contribution to Economic Growth in Europe.” European Investment Bank Papers 14 (1): 62–93. Vanguard. 2015. “Can Active Funds Deliver Persistent Performance?” https://www.vanguard.co.uk/documents/adv/literature/can-active-funds-deliver-persistent-performance.pdf. Walters, Ben. 2016. “What Are Queer Spaces for Anyway?” Not Television. http://www.nottelevision.net/what-are-queer-spaces-for-anyway/. Weitzmann, M.

The Big Short: Inside the Doomsday Machine
by Michael Lewis
Published 1 Nov 2009

Mike Burry couldn't see exactly who was following his financial moves, but he could tell which domains they came from. In the beginning his readers came from EarthLink and AOL. Just random individuals. Pretty soon, however, they weren't. People were coming to his site from mutual funds like Fidelity and big Wall Street investment banks like Morgan Stanley. One day he lit into Vanguard's index funds and almost instantly received a cease and desist order from Vanguard's attorneys. Burry suspected that serious investors might even be acting on his blog posts, but he had no clear idea who they might be. "The market found him," says the Philadelphia mutual fund manager. "He was recognizing patterns no one else was seeing."

The Revolution That Wasn't: GameStop, Reddit, and the Fleecing of Small Investors
by Spencer Jakab
Published 1 Feb 2022

Nudge: Improving Decisions About Health, Wealth, and Happiness
by Richard H. Thaler and Cass R. Sunstein
Published 7 Apr 2008

The problem with this approach is that, as we have already mentioned, most people hardly ever change their portfolios unless they change jobs and have to fill out a new set of forms. So a better way to judge what people are thinking is to look at the percentage of money being invested in stocks by new participants who have just made the decision. We have data on one large group of such participants who were customers of plans administered by the Vanguard mutual fund company. In 1992 new participants were allocating 58 percent of their assets to equities, and by 2000 that percentage had risen to 74. In the next two years, however, the allocation to equities for new participants fell back to 54 percent. Their market timing was backward. They were heavily buying stocks when stock prices were high, and then selling stocks when their prices were low.

Chokepoint Capitalism
by Rebecca Giblin and Cory Doctorow
Published 26 Sep 2022

Creditors certainly lose out—iHeartMedia’s bankruptcy restructure saw its debt reduced to $16.1 million from $5.75 billion, almost the exact amount that had been loaded onto it via the leveraged buyout. Even most of the people who actually invest don’t really win: since 2006, private equity has returned about the same as the market overall—the same as you’d get from a Vanguard index fund—despite requiring investors to tie up their money indefinitely and take on a lot more risk and pay much higher fees.16 Taxpayers are big losers from this too, since they’re increasingly left holding the bag when these investments go south. In 2020 the US Federal Reserve promised to buy corporate bonds, including the riskiest “investment-grade” debt, for the first time in history.

Cashing Out: Win the Wealth Game by Walking Away
by Julien Saunders and Kiersten Saunders
Published 13 Jun 2022

How Markets Fail: The Logic of Economic Calamities
by John Cassidy
Published 10 Nov 2009

Investing in index funds, which keep their fees at minimal levels, is much more sensible. By 2000, tens of millions of Americans had taken Malkiel’s advice and placed much of their retirement money in these types of savings vehicles. (For many years, Malkiel served as a director of the Vanguard Group, which pioneered index funds. Fama joined another firm that manages index funds, Dimensional Fund Advisors.) The rise of efficient market theory also signaled the beginning of quantitative finance. In addition to the random walk model of stock prices, the period between 1950 and 1970 saw the development of the mean-variance approach to portfolio diversification, which Harry Markowitz, another Chicago economist, pioneered; the capital asset pricing model, which a number of different scholars developed independently of one another; and the Black-Scholes option pricing formula, which Fischer Black, an applied mathematician from Harvard, and Myron Scholes, a finance Ph.D. from Chicago, developed.

…

.”: Quoted in “Valuing Those Internet Stocks,” BusinessWeek, February 8, 1999. 179 “I simply can’t analyze . . .”: Quoted in Fidelity Magellan Annual Report, March 31, 1999, available at www.secinfo.com/d1RUq.6c.htm. 179 “Time has come . . .”: “Fidelity Magellan Fund-FMAGX-Rated ‘Aggressive Buy’ and Vanguard 500 Index Fund-VFINX-Rated ‘Buy’ by FidelityAdviser.com,” Business Wire, April 1, 1999. 180 “Is the stock market in a speculative bubble?”: Lauren R. Rublin, “Party On! America’s Portfolio Managers Grow More Bullish on Stocks and Interest Rates,” Barron’s, May 3, 1999, 31–38. 181 Pension fund investment in the Internet bubble: Eli Ofek and Matthew Richardson, “DotCom Mania: The Rise and Fall of Internet Stock Prices,” Journal of Finance 57, no. 3 (June 2003): 1122. 181 “From an efficient markets perspective . . .”: Markus K.

Other People's Money: Masters of the Universe or Servants of the People?
by John Kay
Published 2 Sep 2015

Rigged Money: Beating Wall Street at Its Own Game
by Lee Munson
Published 6 Dec 2011

In a letter to shareholders, the fund said that the fees were “duplicative and excessive.”3 Schwab shot back and prohibited clients from purchasing Longleaf funds except for a select group of institutional advisers. The only problem is that Schwab decides who gets to be a part of that select group. Now that doesn’t sound fair to me. Big players with their own marketing muscle like Vanguard and American Funds would rather be out of the NTF game. How could Vanguard offer rock bottom prices if forced to pay 0.4 percent to Schwab? Well, they just pay less. That is easy to do if you are already a major player with strong demand. If you are using a transaction fee fund—the type of fund where you pay a small fee to trade in your brokerage account—Schwab still gets some money from the fund.

Smart Money: How High-Stakes Financial Innovation Is Reshaping Our WorldÑFor the Better
by Andrew Palmer
Published 13 Apr 2015

They may be fast, critics say, but they are thoughtless.22 Yet the academic consensus also broadly supports the contention that high-frequency traders have helped bring down transaction costs. The British government’s lengthy 2012 investigation of automated trading found that liquidity had improved, bid-ask spreads had narrowed, and markets had become more efficient. Testimony delivered to the Securities and Exchange Commission in 2010 by George Sauter of Vanguard, a big fund manager, concluded that “high-frequency traders provide liquidity and ‘knit’ together our increasingly fragmented marketplace, resulting in tighter spreads that benefit all investors.”23 (Critics riposte that narrower spreads are illusory if the prices quoted are not the ones at which trades are actually executed.)

Investing Amid Low Expected Returns: Making the Most When Markets Offer the Least
by Antti Ilmanen
Published 24 Feb 2022

Finally, some observers may use exceptionally high or low current CAPE or CAEY to indicate return potential from mean-reverting E(ΔV); as noted, I assume no mean reversion here. 15 Survey expectations on long-run total equity returns in Figure 4.6 are mostly between 5% and 7% in the 2010s. Looking at a few other survey sources may be interesting. Andonov-Rauh (2020) report about 9% return expectations among US public DB plans, the higher level perhaps justified by a multi-decade horizon. Giglio et al. (2021) report about 6% return expectations among Vanguard mutual fund investors, but a Natixis Investment Managers' 2019 survey of individual investors reveals double-digit return expectations in all countries, including the US (see Huber (2021)). Apparently, the Vanguard clients do not drink the same Kool-Aid as other retail investors. 16 In contrast, Kuvshinov-Zimmerman (2021) reports that global stock market capitalization grew in line with GDP between 1870 and the 1980s (more due to net issuance than higher stock prices), but thereafter grew much faster – mainly due to the rising profit share of the listed sector but also due to lower discount rates. 17 Net issuance is the difference between gross equity issuance and gross buybacks.

Money Moments: Simple Steps to Financial Well-Being
by Jason Butler
Published 22 Nov 2017

Buy Now, Pay Later: The Extraordinary Story of Afterpay
by Jonathan Shapiro and James Eyers
Published 2 Aug 2021

But the speed of Afterpay’s acceleration up the market capitalisation rankings caught these funds off guard. The sheer size of Afterpay, and its ability to swing, left the likes of Blackrock scrambling to buy shares. Traders at the big firms had rung the big investment banks to put them on notice that they would buy any large blocks of Afterpay that were up for sale. Vanguard, the multitrillion-dollar index fund giant, had owned 2.1 million Afterpay shares at the end of 2018, and had increased its holding to 7 million shares a year later. By mid-2020, Vanguard owned 9.7 million shares. By the end of the year, it had upped this to 15.7 million. Blackrock, the other index fund titan, had to scramble harder.

…

Morgan 53, 120, 162, 251 Juul Labs 237–8 Kardashian, Kim 189 the Kardashians 188 Karzis, Sophie 116 Kassabgi, Damian 196, 207, 299, 304, 322 Katsalidis, Nona 57 Kaufman, Lilly 1–2 Kaufman, Susie 2, 3 Kaufman, Zoltan 1, 2 Kell, Peter 144, 163, 202, 207 Kelly, Rachel 129, 130–1, 135, 136 Khalifa, Mia 311 Kidman, Matthew 18, 95 King, Phil 185 Kingston, Beverley Basket, Bag and Trolley 45 Kitney, Damon 194 Klarna 81, 133, 187, 245, 279, 284, 291, 316, 317 Commonwealth Bank and 247–8, 337–8 United States launch 190 Kohler, Alan 209 Laffont, Philippe 234–5, 257, 258, 295, 335 Langley, Ron 83 Latitude Financial 118, 256–7 Lau, Sarah 128 Lawrence, Martin 149 lay-by 41, 44, 45, 46–7 costs to retailer 48–9 digitising of 47–8 Leeser, Julian 304 Lehman Brothers 177 Leibovich, Gabby Catch of the Day 89 Leigh, Andrew 287, 288 Lennie, Nadine 116 Lenton, Shane 88 Letts, Darren 175, 176 Levchin, Max 81, 190, 284, 312 Levis, Justin 87 Levis, Rod 87, 88 Lew, Solomon 129, 133, 270 Lindenberg, Brad 131, 279 Lipski, Simon 8 Little, Jason 11 Liu, Jun Bei 160 Livewire 240, 292 Lone Pine Capital 235, 236, 281, 295, 311 Loton, Brian 71 Lowde, Rebecca 289 Lowe, Philip 204, 205, 206, 260, 261, 266, 301, 341 Lowy, Frank 6, 7, 9, 31, 174 Lowy, Hugo 6 Lu, Janet 95 Lululemon 161 Lustig, Ted 9 McAllister, Jenny 146, 329 McBain, John 85 McCann, Edwina 305 Macaulay, Louise 142 McClelland, Colin 309 McCrohan, Sharon 197–8 McGarry, Ben 261, 267, 289–90 MacGraw, Beth 305 MacGraw, Tessa 305 McKenzie, Mark 262 McNamara, Peter 205, 206 Madden, Steve 191 Malek, Ron 23 Mandel, Steve 236, 295 Marshall, David 83 Mastercard 46, 108, 219, 220, 255, 263, 302, 339 Masters of the Market 18, 31 Matrix 157, 172, 173, 242, 331–2 Mawhinney, Simon 292 Maxsted, Lindsay 258 Maxwell, Robert 28 May, Rob 48–9 Mayne, Stephen 258 Medcraft, Greg 142, 144 Melbourne Jewish community 5 Melvin Capital 308–9 Meriton 6 Messara, Mike 127 Mickey Mouse report 148–51, 167, 227 millennials, Gen Z, Gen X 208–9, 331 credit cards and 40, 41, 52, 73, 208, 217, 222 trend makers, as 308, 311 Mitchell, Jacob 177 Mitchell, James 275 Mitchell, Paula 87 Moar, Max 9 Molnar, Michele 4, 13, 40, 76, 134 Molnar, Nick 3, 4, 11, 38, 73, 194 Afterpay see Afterpay Banking and Wealth Summit 2020 303 bar mitzvah 12 Eisen, meeting 39–40 fortune, personal 277, 333 Ice Online see Ice Online marriage and family 88, 194, 210, 277, 303 online jewellery sales 13, 14, 38–9 real estate purchases 343 rugby 11, 12, 13 Senate inquiry appearance 210–11 Shmuel Gniwisch 14, 16, 40, 172 TEDxYouth@Sydney 2017 171 United States expansion 172–3, 187, 190, 188, 226, 244–5 Molnar, Ronald 3–4, 12, 38–9, 108, 134, 168 Molnar, Simon 4, 13, 40 Ice Online see Ice Online Molnar, Vivian 3, 4 Montgomery, Roger 181, 182 Moore, Daniel 291 Mordant, Simon 23, 117 Moreno, Antonio 244 Morgan Stanley 97, 282 Moriah War Memorial College 4, 5–6, 10, 100, 131, 343 Morrison, Scott 145, 225, 226, 250, 260 pro-fintech position 250, 302–3 Mott, Jonathan 252, 255 Mulcahy, Julian 136, 336 Mumbrella 153 Murdoch, Rupert 126 Musk, Elon 176–8, 309, 311 Myer 44 MYOB 24, 30, 34, 96 Nadella, Satya 302 Nagley, Harold 4, 5, 10 Narev, Ian 217–18, 247 Nasdaq index 101, 102, 180, 232–3 National Australia Bank Afterpay financing 108–10, 121, 123, 168, 216, 251 Hayne Royal Commission 141, 142, 216 National Consumer Credit Protection Act 146, 203, 205, 212, 223, 326 National Debt Helpline 144, 201 National Press Club 260 Netflix 182 Ng, Jeffery 84 Ng, Wendy 58, 116, 117, 159, 267 Nguyen, John 55 Ngwe, Donald 244 Nixon, Blake 28, 31 Ocasio-Cortez, Alexandria 310 O’Connor, Debbie 153 O’Dwyer, Kelly 143 O’Halloran, Xavier 151 O’Neil, Clare 146 online classified platforms 126, 127 Openpay 251 Ord Minnett 175, 246, 251 Orr, Rowena 141 Ovienrioba, Oghosa 319–20 Ownership Matters 148–51, 167, 241, 242 Paatsch, Dean 149, 150–1 Packer, James 126 Packer, Kerry 27, 126 Padley, Marcus 160, 192, 282–3 Pagantis 286 Pape, Scott The Barefoot Investor 154 Paulson, Hank 302 payday lending 146, 212, 320 PayPal 54, 77, 166, 172, 187, 285, 302, 314 Peloton 313–14 Phillpot, Rob 155 Pichai, Sundar 302 Piper, Tim 315 platform companies 128, 240, 263 Plotkin, Gabe 308, 310 Portnoy, Dave 278, 309, 310 Poseidon bubble 96 Powell, Jerome 186, 207 Press, Danielle 202 Princess Polly 76, 77, 79, 106 property development 7, 20 Prunty, Chris 128, 129 Quadpay 131, 187, 270, 315 QVG 128 rag trade 9, 19 REA Group 126, 127 Rechtman, Andrew 76 Redrup, Yolanda 156 regulation of BNPL sector 201 ASIC inquiry 137, 140, 144, 145, 148, 191 ASIC reports 202–4, 297, 298, 299 Reserve Bank 206, 254, 296 Bragg inquiry see Select Committee on Financial Technology and Regulatory Technology Senate inquiry see Senate Economics References Committee inquiry United Kingdom 288, 320–2 regulators, role 287, 296, 297, 298, 300–1 research analysts 252, 253, 280 risk-averse 271 Reserve Bank 206, 254, 295, 302, 341 bond-buying program 269 no-surcharge rules 254, 255, 262, 295, 301, 302, 341 Richardson, Tom 311, 316 Roberts, Matt 251 Robertson, Hugh Walter 58, 67, 133 Afterpay 78, 84, 90, 93, 99 background and early career 70 private investors 71, 72, 84 Touchcorp IPO and 67, 72–3, 85 Robertson, Julian 232 , 233, 235, 245, 295 Robinhood trading app 278, 310 Rose, Nicole 228 Rosenberg, Cliff 84, 90 Rosenblum, Rupert 12 Roth, Mike 94 Rubin, Elana 67, 116, 229, 262 Rudd, Kevin 134, 196, 205, 226, 326 Ryan, Tony 28, 29 Saadat, Michael 139, 143, 144, 202, 212, 213, 221 Afterpay role 229, 248 code of conduct 324–6, 328 Salt, Bernard 208 Sams, Lauren 306, 307, 311, 312 Samson, James 241–2 Samway, Tim 156 Saunders, John 6, 7, 9, 174 Saville, Duncan 63, 65, 68, 84 Afterpay Touch shareholding 118, 175 Scheinberg, Albert 9 Schulman, Daniel 314 Schwarz, Stephanie 10–11, 343 Seafolly 8 SEEK 126 Select Committee on Financial Technology and Regulatory Technology 249 Afterpay presentation to 262–3 report 286–7, 296, 297 Senate Economics References Committee inquiry 145–8, 154, 186 hearings 209, 210–12 report 223 scope 200–1 Serjeant, Tim 187 Sezzle 131, 175, 187, 267, 285, 315 ASX listing 246, 247 share market banks and mining, dominance of 91, 92 day traders 278–9, 308–10 dual-class share structure companies 102 founders, sale of shares by 156, 281, 333 short-sellers 156, 165, 167, 175, 176–7, 185, 186, 276, 289, 308–9 tech companies 96, 101 value 91 Shein, David 90 Sher, Steve 84 Shervington, Laurie 65 Shipton, James 142, 143 Shopify 282, 284, 313 Shorten, Bill 139, 145, 198, 225, 226, 249 Showpo 95 Shulman, Gabi 86, 88 Sidereal Holdings 83, 117 Siemiatkowski, Sebastien 190 Simmonds, Julian 287 Singer Sewing Machines 42 Skamvougeras, Paul 84 Smith, Steve 197 Snapchat 98 Solution 6 23, 24 Soros, George 232, 233 Sotiriou, Lafitani 113, 121, 133, 162, 164–5, 166, 224 Spiro, Dov 24 Splitit 246 Stadnik, Andrei 282 Stalder, Dana 157, 172, 187, 242, 243 Stevens, Chris 289 Stockland Trust 9 Stocks Down Under 276, 284 Stouffer, Tracy 133 Strachman, Daniel 233 Strasser, Nicole 5 Sugar, Brian 188 PopSugar 188 Sullivan, Angus 338 Summers, Larry 249 superannuation 182, 270 Surowiecki, James 47 Surry Hills 19–20 Swanson, Eleanor 272, 292 Sydney Jewish community 3, 5, 7–8 Sydney Morning Herald 40 Sykes, Trevor 29, 30 Tabakoff, Nick 23 TAFMO 61, 63, 64, 84 Tagliaferro, Anton 291 ‘tap and go’ payments 120 Tate, Diane 325, 326, 329 Taub, Stephen 295 Taylor, Mike 114 tech-stock bubble 15, 16, 23, 98, 180, 183, 232–3 Telstra privatisation 21, 22 Temple Emanuel 4 Tencent 274–6, 280, 289 Ters, Jason 36, 83 Tesla 176–8, 268, 275, 295 Textor, Mark 340 Thiel, Peter 122, 176, 284 Thompson, Sarah 168 Thorburn, Andrew 141, 216 Thread Together 307, 308 Tiger Cubs 233, 234, 235, 236, 239, 258, 275, 295, 311 Tiger Global 234, 282, 295, 311 Tiger Management 228, 232, 233, 235 TikTok 307 Touch Payments 82 Touchcorp 54, 58, 59 Afterpay payment platform 54–5, 59 Intellect and 62 Touchcorp Holdings Pty Ltd 64, 66, 104, 116 Afterpay, merger with see Afterpay Touch (APT) IPO 58, 59, 67–8, 84 Treasury 296, 297, 300, 301 ‘responsible lending’ laws 326–7 Triguboff, Harry 6 Trump, Donald 112 Turnbull, Malcolm 140, 145, 197, 213, 225, 249 Twitter 98, 102 Tyabji, Hatim 63–4, 66 Tyler, Chris 23 Uber 140, 196, 242, 263, 289, 299 UBS investment conference 2016 110, 111 October 2019 report 252, 253, 255–6 ‘unicorn’ status 120, 183 United Kingdom Afterpay expansion into 184, 224, 264 Financial Conduct Authority (FCA) 320, 321, 323 regulation of BNPL sector 288, 320–2 United States Black Lives Matter 277 election 2016 111–12 expansion into 157–8, 173–4, 190, 243–4, 265 fashion market 158 Federal Reserve COVID-19 response 273 regulatory risks in 267 Uphold & Recognise 304 Valmorbida, Val 57 van den Berg, Stefan 184 van Dongen, Yvonne 27 Vanguard 293, 294 venture funds 98, 99 Veronika Maine 107, 111, 113 Verrender, Ian 152 Verwer, Peter 302 VGI Partners 186–7 Visa 46, 108, 219, 220, 246, 263, 279, 302, 339 WAAAX stocks 182 Waislitz, Alex 71, 112, 183, 274, 342 Walburgh, Fetzie 55 Walker, Gavin 35 The Wall Street Journal 295 Wallis, Stan 220 Walsh, Michael 110 Warner, David 198 Warren, Elizabeth 310 Waters, Tony 128, 129 WeChat 275 The Weekend Australian 194 Weiss, Gary 17, 18, 19, 24, 35, 63, 125 background 25–6 ClearView 36 Coats acquisition 31–2 GPG see Guinness Peat Group (GPG) Industrial Equity Limited (IEL) 26 Westfield 6–7, 90, 174, 306–7, 310–11 Westpac Banking Corporation 51, 247, 327 Afterpay Money and 290–1, 338, 339, 340 anti-money laundering breaches 258–9 White, Richard 97, 281 Whitlam Turnbull bank 18 Whittaker, Marc 240 Wilson, Geoff 18, 94, 125, 225 Future Generations fund 125, 126 Wilson, Matthew 336 Wilson, Tim 225 Wilson Asset Management 93, 94, 125, 251 Wilson HTM 67, 68, 72, 93, 113, 184 Winkler, Craig 34 Winters, John 101 WiseTech Global 97, 182, 281 Women’s Wear Daily 188, 226 Wonga pay day loan scandal 322 Woodson Capital 238–9, 295, 311 Woolard, Christopher 320, 321, 322 World Health Organization 261 World Maccabiah Games 12 World War II 1 Wran, Neville 18 Wylie, John 13, 22, 39 Xenita, Natalie 307 Xero 34, 96, 182 Xu, Nesta 55 Yahoo!

The Trouble With Billionaires
by Linda McQuaig
Published 1 May 2013

In the past, corporate and financial professionals were regarded as agents who managed the enterprises of the owning class. In recent decades, however, these management professionals have moved centre-stage, grabbing more power for themselves – and a much larger share of the financial rewards. The result, according to John C. Bogle, founder and former chairman of US-based Vanguard Group mutual fund organization, has been ‘grotesquely excessive compensation paid to executive chiefs’ – compensation that is ‘unjustified by ‌any remotely comparable business achievement’.18 Bogle argues that the corporate world is now riddled with conflicts of interest, leaving little check on the cosy relations between CEOs and corporate directors, compensation committees and auditors.

Who Stole the American Dream?
by Hedrick Smith
Published 10 Sep 2012

As the Harvard-Cornell team put it, there were “lucky directors” motivated to manipulate the option dates of their “lucky CEOs” because the board members also “luckily” got backdated options. Options: A Smokescreen for Wealth Transfer Some of the sharpest criticism of the stock options game came not from academics or liberal politicians, but from staunch capitalists such as John C. (Jack) Bogle, founder and longtime chairman of the Vanguard mutual fund family. Bogle contended that ordinary shareholders were being cheated by the massive stock grants given to CEOs because the value of everyone else’s shares was being diluted by the gift of free or low-cost shares to the executive elite. In his book The Battle for the Soul of Capitalism, Bogle derided the whole concept as a smokescreen for a massive “wealth transfer to [corporate] insiders” from ordinary investors.

Chaos Kings: How Wall Street Traders Make Billions in the New Age of Crisis
by Scott Patterson
Published 5 Jun 2023

The Devil's Derivatives: The Untold Story of the Slick Traders and Hapless Regulators Who Almost Blew Up Wall Street . . . And Are Ready to Do It Again
by Nicholas Dunbar
Published 11 Jul 2011

The Einstein of Money: The Life and Timeless Financial Wisdom of Benjamin Graham
by Joe Carlen
Published 14 Apr 2012

Broke: How to Survive the Middle Class Crisis
by David Boyle
Published 15 Jan 2014

The Behavioral Investor
by Daniel Crosby
Published 15 Feb 2018

Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant
by W. Chan Kim and Renée A. Mauborgne
Published 20 Jan 2014

So instead of using brokers and regional branch offices, Direct Line uses information technology to improve claims handling, and it passes on some of the cost savings to customers in the form of lower insurance premiums. For more than twenty years since its inception, Direct Line’s blue ocean strategic move has been winning customers and awards including that for the best, most trusted, and most innovative motor insurance brand in the UK. In the United States, The Vanguard Group (in index funds) and Charles Schwab (in brokerage services) did the same thing in the investment industry, creating a blue ocean by transforming emotionally oriented businesses based on personal relationships into high-performance, low-cost functional businesses. Does your industry compete on functionality or emotional appeal?

How Boards Work: And How They Can Work Better in a Chaotic World
by Dambisa Moyo
Published 3 May 2021

Two and Twenty: How the Masters of Private Equity Always Win
by Sachin Khajuria
Published 13 Jun 2022

Perhaps retail-friendly funds could target lower-risk, lower-return investments to make only what they need for retirement and no more. The idea is to fix in the psyche of ordinary citizens a mentality to see investing in private equity in the same routine way as investing in the stock market via a Vanguard or BlackRock mutual fund, index fund, or ETF. Those well-known investment firms manage trillions of dollars of retail money. David’s thoughts wander to his parents. Would he want their 401(k) invested in the Firm’s stock or the Firm’s funds? Or both? What would investing in private equity—and its close cousins across the product range in private capital—mean for them?

Smarter Investing
by Tim Hale
Published 2 Sep 2014

Can't Even: How Millennials Became the Burnout Generation
by Anne Helen Petersen
Published 14 Jan 2021

Everything for Everyone: The Radical Tradition That Is Shaping the Next Economy
by Nathan Schneider
Published 10 Sep 2018

Radical Markets: Uprooting Capitalism and Democracy for a Just Society
by Eric Posner and E. Weyl
Published 14 May 2018

TABLE 4.1: The top five shareholders of the six largest US banks Source: José Azar, Sahil Raina, & Martin C. Schmalz, Ultimate Ownership and Bank Competition (unpublished manuscript, July 23, 2016), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2710252. *Warrants without voting rights. Furthermore, most institutional investors (but not Vanguard) offer many managed funds that pick stocks and thus threaten to sell stock if the firms they invest in do not follow their advice. The actual role of institutional investors in governance remains the subject of debate. But the debate misses the real importance of the rise of institutional investors: that if they control the firms they own, then they can use this control for bad purposes as well as good.

Trend Following: How Great Traders Make Millions in Up or Down Markets
by Michael W. Covel
Published 19 Mar 2007

Shadow Work: The Unpaid, Unseen Jobs That Fill Your Day
by Craig Lambert
Published 30 Apr 2015

Basic Economics
by Thomas Sowell
Published 1 Jan 2000

With the restoration of price stability in the last two decades of the twentieth century, both stocks and bonds had positive rates of real returns.{483} But, during the first decade of the twenty-first century, all that changed, as the New York Times reported: If you invested $100,000 on Jan. 1, 2000, in the Vanguard index fund that tracks the Standard & Poor’s 500, you would have ended up with $89,072 by mid-December of 2009. Adjust that for inflation by putting it in January 2000 dollars and you’re left with $69,114.{484} With a more diversified portfolio and a more complex investment strategy, however, the original $100,000 investment would have grown to $313,747 over the same time period, worth $260,102 in January 2000 dollars, taking inflation into account.{485} Risk is always specific to the time at which a decision is made.

Fault Lines: How Hidden Fractures Still Threaten the World Economy
by Raghuram Rajan
Published 24 May 2010

Woke, Inc: Inside Corporate America's Social Justice Scam
by Vivek Ramaswamy
Published 16 Aug 2021

The Bond King: How One Man Made a Market, Built an Empire, and Lost It All
by Mary Childs
Published 15 Mar 2022

Flash Boys: A Wall Street Revolt
by Michael Lewis
Published 30 Mar 2014

Finding Alphas: A Quantitative Approach to Building Trading Strategies
by Igor Tulchinsky
Published 30 Sep 2019

In contrast to the Russell 2000, large-cap and total-market-tracking products typically do not suffer as much of a rebalancing drag on their portfolios. The S&P 500, for example, tends not to see as much reversion in added stocks, perhaps owing to their higher liquidity or late purchases by closet trackers, who cannot predict S&P additions as easily. Meanwhile, the CRSP US. Total Market Index, which is tracked by Vanguard Group’s largest index funds, encompasses the entire US market, from large caps to microcaps, and accordingly does not trigger any trading Finding an Index Alpha227 requirements when cap-size migrations occur. (However, funds benchmarked to the individual capitalization ranges would still need to trade and thus potentially would impact market prices for some illiquid stocks.)

Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America
by David Callahan
Published 9 Aug 2010

American Foundations: An Investigative History
by Mark Dowie
Published 3 Oct 2009

The Missing Billionaires: A Guide to Better Financial Decisions
by Victor Haghani and James White
Published 27 Aug 2023

Makers and Takers: The Rise of Finance and the Fall of American Business
by Rana Foroohar
Published 16 May 2016

Tightrope: Americans Reaching for Hope
by Nicholas D. Kristof and Sheryl Wudunn
Published 14 Jan 2020

Energy: A Human History
by Richard Rhodes
Published 28 May 2018

Reflection, surface and contact resistance, and other factors halved that efficiency, suggesting that 11 percent was probably a maximum.3 The real problem with early PV cells was cost: after one six-month trial application in a Georgia telephone system, Bell made no further effort to use them.4 One of the German scientists who came to the United States after World War II, working for the army at its Signal Corps laboratory at Fort Monmouth, New Jersey, was impressed with Bell’s PV cells. Hans K. Ziegler championed installing them on the first US communications satellite, Vanguard I, a project funded by the Department of Defense and the US Navy. The two funders fought over the power source: the Navy preferred batteries. In a compromise that became a seminal experiment, both power sources were installed on the 6.4-inch, 3.5-pound Vanguard I, which was launched on 17 March 1958 atop a three-stage Vanguard rocket.

The Meritocracy Trap: How America's Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite
by Daniel Markovits
Published 14 Sep 2019

The average rate of return of a diversified stock portfolio over the past decades is under 7 percent. The average annual return over the last ten years for the Vanguard Balanced Composite Index, for example, is 6.83 percent. See “Benchmark Returns,” Vanguard, last modified September 30, 2018, https://personal.vanguard.com/us/funds/tools/benchmarkreturns. See Goldin and Katz, The Race Between Education and Technology, 336. See also David Card, “The Causal Effect of Education on Earnings,” in Handbook of Labor Economics, vol. 3A, ed. Orley C. Ashenfelter and David Card (Amsterdam: Elsevier, 1999): 1801–63; David Card, “Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems,” Econometrica 69 (September 2001): 1127–60.

Ultra-Processed People: The Science Behind Food That Isn't Food
by Chris van Tulleken
Published 26 Jun 2023

Last Man Standing: The Ascent of Jamie Dimon and JPMorgan Chase
by Duff McDonald
Published 5 Oct 2009

Despite the loftiness of the title, she didn’t oversee money management, operations, or finance for the fund group. Dimon and Bibliowicz had been friends since childhood, but their relationship began to fray the next year, when Dimon pushed for the company to sell no-load mutual funds in response to the success of Vanguard and other no-load fund companies. Bibliowicz resisted the idea, arguing that the company should stick to its own internal funds—brokers were far more motivated to sell them, after all, because of the commissions—and Weill himself sided with her in discussions on the subject. Dimon eventually won the debate, and in July 1996 Smith Barney was the first Wall Street broker to sell no-load funds.

Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives
by Satyajit Das
Published 15 Nov 2006

The trustee meetings were never the same again. Agents all The entire investment management process is flawed – projected returns are too high and actual returns are measured with tools that the fund managers and asset consultants choose. It is like getting a student to mark their own exams. John Bogle, the founder of Vanguard, a low-cost mutual fund manager, is the Bolshevik of the industry. His arguments are simple: fund expenses are too high; trading costs eat into returns as fund managers churn portfolios to the delight of dealers; hidden fees and charges eat into the value of investments; a small difference of 1% or 2% each year in return over 30 years is staggering.

A Man for All Markets
by Edward O. Thorp
Published 15 Nov 2016

The number of households worth at least $1 million was thought to be about ten million in 2015. With so many millionaire households, the goal of becoming one of them looks within reach. To see what might be done, imagine you’re an eighteen-year-old blue-collar worker with no savings and no prospects. What if, somehow, you could save $6 a day and buy shares in the Vanguard S&P 500 Index Fund at the end of each month? If that investment grows in a tax-deferred retirement plan at the long-term average for large stocks of about 10 percent, then after forty-seven years you can retire at age sixty-five with $2.4 million. But where do you find an extra $6 a day? The pack-and-a-half-a-day smoker who kicks his drug habit saves $6 each day.

Efficiently Inefficient: How Smart Money Invests and Market Prices Are Determined
by Lasse Heje Pedersen
Published 12 Apr 2015

The Best Business Writing 2013
by Dean Starkman
Published 1 Jan 2013

Investment: A History
by Norton Reamer and Jesse Downing
Published 19 Feb 2016

And indeed, other early index funds with exceptionally high fees did not enjoy sustained success. Colonial Index Trust, for instance, generally involved a sales load of 4.75 percent and a running expense ratio of 1.5 percent. This fund lasted only 7 years, closing in 1993.57 It was not until the early 1990s that Vanguard started to see any meaningful competition. Vanguard had eleven different index funds by the end of 1992. That same year, thirty-five new index funds were formed by competitors, bringing the total number of index mutual funds in the investment market to just under eighty. The universe of product offerings also expanded. In 1993, Vanguard and some of its competitors offered the first bond index funds.

Behemoth: A History of the Factory and the Making of the Modern World
by Joshua B. Freeman
Published 27 Feb 2018

But for many, the future has already come and gone, perhaps leaving them with sneakers and a smartphone, but with little hope or belief in their ability to create a new world, a post-factory world that builds on the extraordinary advances of the giant factory to forge a new and different kind of modernity, one more democratic and more sustainable, socially, economically, and, perhaps most important, ecologically. We are all in this, all implicated. In 2016, the second-largest holder of stock in Hon Hai Precision Industry, the major owner of Foxconn Technology Company, was The Vanguard Group, Inc., a mutual fund company with a benign image that holds the savings and retirement accounts of more than twenty million people (including this author). Very few of them were aware that they owned a piece of a factory from the roof of which workers jumped to their deaths in despair. (Vanguard also was the third-largest holder of stock in Pegatron Corporation, Foxconn’s biggest rival, and the ninth-largest holder of stock in footwear maker Yue Yuen.)