John C. Bogle to Speak at Bryn Mawr Presbyterian Church
Mike - Apr 17, 2014

John C. Bogle will speak at the Bryn Mawr Presbyterian Church on Monday, April 28, at 7:30 p.m. Below is some additional detail about the event from bmpc.org.

 

Finance Icon John C. Bogle to Speak at Bryn Mawr Presbyterian Church

BRYN MAWR, Pa. (April 10, 2014) – As part of its Community Forum Distinguished Speaker Series, Bryn Mawr Presbyterian Church will host John C. Bogle, founder and former CEO of the Vanguard Group, Inc., on Monday, April 28, at 7:30 p.m. as he speaks on the topic of “Financial Reform: Investment Standards and Ethical Values.”

At Vanguard, Bogle pioneered low-cost index investing and no-load mutual funds. He is the author of ten books, including The Clash of the Cultures: Investment vs. Speculation and The Little Book of Common Sense Investing, and is currently president of Vanguard’s Bogle Financial Market Research Center.

In The Vanguard Experiment: John Bogle’s Quest to Transform the Mutual Fund Industry (1996), biographer Robert Slater describes the life of John Bogle as “evolutionary, iconoclastic and uncompromisingly committed to his founding principles of putting the interests of the investor first and constructively criticizing the fund industry for practices that run counter to low-cost, client-oriented mutual fund investing.” Bogle questions, among other issues, current practices in executive compensation, political donations, and marketing expenditures.

This free event will be held in the church Sanctuary and is open to the public. Reservations are not necessary. For more information, visit www.bmpc.org or call 610–525-2821.

About Bryn Mawr Presbyterian Church
Bryn Mawr Presbyterian Church (BMPC), located at 625 Montgomery Avenue, Bryn Mawr, Pa., was first organized by 16 men and women in 1873, and today serves as a Christian community of more than 2,500 members of all ages. Known for its open-minded and inclusive theology, the church provides opportunities to connect with God’s word in Sunday worship services, Sunday school, adult education classes, youth activities, confirmation class, fine arts or music, interest groups, and community service/outreach activities, and serves as a place to gather, learn, and serve God. For more information about Bryn Mawr Presbyterian Church, please call 610–525-2821 or visit www.bmpc.org.

Contact:
Donna Barrickman, Communications Director
610–525-2821, ext. 8809
DonnaBarrickman@bmpc.org This email address is being protected from spambots. You need JavaScript enabled to view it.

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A high-resolution photo of John C. Bogle is available here. (To save the photo, right click and select “Save Image As”)


Ring In the New
Mike - Jan 02, 2014

January 2, 2014

 

 

To VANGUARD VETERANS AND PRINCIPALS:

 

“Ring In the New” follows the “Ring Out the Old” note that I sent you on December 31, 2013.  As 2014 begins, I’m pleased to send my first mailing of the new year, an essay entitled, The Arithmetic of “All-In” Fund Expenses. (Financial Analysts Journal, January/February 2014, ahead of print.) This Perspectives piece is my eighth article for this top professional journal, aimed importantly at CFA charterholders. (Congratulations to our 200 Vanguard crewmembers who have met these demanding standards!)

 

            My FAJ essay breaks new ground in its attempt to fill a huge gap in the analysis of the impact of mutual fund costs on shareholder returns. Up until now, consideration of fund costs has been almost universally limited to expense ratios, which currently average 1.12 percent for actively-managed equity funds. My piece notes that there are other, even higher costs that must be taken into consideration: fund portfolio turnover costs, cash drag, and sales loads and fees paid to brokers and financial advisers. By my calculation, those costs come to about 1.15 percent (a conservative estimate), bringing total costs of actively-managed equity funds to 2.27 percent annually.

 

            I go even further in my article, and consider the impact of taxes for investors in active funds—I estimate 0.75 percentage points—and the costs of investor behavior (buying funds after they hit the jackpot). Based on Morningstar data, I use an estimate of 1.20 percentage points. Now we’re up to a total of 4.22 percent in costs of actively-managed funds.

 

Now, let’s assume a stock market annual return over the coming decade at a reasonable 7 percent in nominal terms. With, say, 2 ½ percent inflation, that’s a 4 ½ percent real return. “All-in” fund costs would confiscate 94 percent of the stock market’s annual real return. In essence, that’s why “costs matter,” and why low-cost index funds are thriving.

 

            My article represents an extension of the data produced by Nobel Laureate William F. Sharpe in the FAJ of a year ago on the subject of expense ratios of active funds vs. index funds. He likes my broader approach, and has already endorsed my new article: “What a wonderful combination! . . . Your final sentence says it once again, concisely and powerfully.”

 

            Morningstar’s veteran analyst (and noted skeptic) John Rekenthaler has also endorsed my essay: “The best treatment yet of the subject.” As John approvingly comments on my cost estimates, “Better roughly right than precisely wrong.”

 

            I hope those of you concerned with these issues will give “The Arithmetic of ‘All-In’ Investment Expenses” the attention I believe it merits in making an even stronger case for index funds, well beyond the data that we conventionally rely upon. The final three paragraphs of my long paper provide the essential message, and I encourage all crew members to consider this vital addition to the full understanding of the “all-in” costs of active investing.

 

                        Jack                                    

 

P.S. As is my practice, I’m also posting this paper on my eblog, www.johncbogle.com, where it is available to all crew members and to the public.

 


[1] The final sentence of my essay: Do not allow the tyranny of compounding costs to overwhelm the magic of compounding returns. (Italics in original.)


John Bogle on Marketplace: Family finance lessons
Mike - Nov 19, 2013

Click here to visit Marketplace.org.


Bogle on Bloomberg TV
Mike - Nov 12, 2013


Bogle on CNBC
Mike - Oct 30, 2013


Morningstar Interview at 2013 Bogleheads Conference
Mike - Oct 24, 2013

Bogle’s Expectations for Stocks and Bonds

Be Sensible About Rebalancing

Indexing Always Pays Off


This Week in the Boardroom
Mike - Oct 17, 2013

Jack was recently interviewed by TK Kerstetter for the web series This Week in the Boardroom.


MoneyLife with Chuck Jaffe–The Big Interview
Mike - Sep 26, 2013

Jack recently appeard on Chuck Jaffe’s radio show MoneyLife for “The Big Interview.”

MoneyLife with Chuck Jaffe: The Big Interview, Part 1

MoneyLife with Chuck Jaffe: The Big Interview, Part 2


A Memo to Vanguard Veterans and Principals
Mike - Sep 13, 2013

To Vanguard Veterans and Principals

I’m sending along some of the press clippings that you may have missed during the dog days of summer, now rapidly coming to a close:

M/1. Bogle Weighs In On Key Issues. Morningstar’s summary of my extensive interview at the 25th Annual Morningstar Investment Conference. Responding to tough questions, I gave blunt—but, I hope, tactful—answers.

F/1. Enrich Your 401(k) In One Simple Move Using The Bogle Gospel. A nice article from FORBES on August 30. Little you’ll see there will surprise you, except that my correcting (sort of) the math of a Nobel Laureate may be a first.

FT 1/2/3. Vanguard’s Bogle Responds To ‘Parasite’ Tag. The first of five articles published by the Financial Times during the late summer, my somewhat sharp response to a London money manager’s opinion piece alleging that index funds are Passive Parasites . . . A commentary on this debate—An Elegantly Simple Formula Shows Why Passive Investing Will Earn Higher Returns Than Active Investing—is attached as well.

FT 4/5. Hidden Fund Costs Are Hurting Investors. Separately, the Financial Times relied on research that I recently completed for the Financial Analysts Journal. Included is an interesting ETF story whose headline—Performance will Replace Price as Weapon of Choice —may well be correct.

FA/1. Bogle Pressures SEC On Fund Firm Fiduciary Rule. A rare story from Fund Action on the work that I’ve been doing to persuade the SEC to deal with the (almost) industry-wide conflict between the interests of fund managers and the interests of fund shareowners.

HK/1. From Hong Kong, The Ten ___iest People On Wall Street. It may well be that Maria Bartiromo deserves to be ranked #1, but it’s a tad idiotic for me to be #6, especially compared to Tim Geithner (#7) and Jamie Dimon (#8), both of whom are three decades younger than I. (To avoid the possibility of violating company policy, I will not provide translation.)

These are interesting times. Be sure to enjoy them.

Jack


John C. Bogle on Founders Films
Mike - Sep 13, 2013