Bogle: And you work back and you have got to think about, I figured out Tom how to do it, but when I first introduced this rule I remember back in 1999 in Morningstar I told them that I was reducing my equity position from about 75% of my holdings to I think 30% of my holding because the stock market was selling at 35 times earnings and the bond market was yielding 7% and I looked at the transcript a while back and I said honestly when I look at it I don't see why I would hold any stocks at all, because at 30 times, 35 times yearnings stocks were not going to give you a 7% return of the first decade of the 21st century. These companies are real estate investment trusts (REITs). So you have to think a little bit differently but I haven't done anything about that I haven't changed my portfolio. And then I'd also say, much more importantly than that, and that is if the idea of indexing, as Paul Simon described it when he wrote the foreword to my first book, is you will get better returns than your neighbors and sleep better than your neighbors. A Division of NBCUniversal. The unit cost, in fairness, cost for trading a share, it's maybe 30 cents. And, that fiduciary duty is ... those two fiduciary duties are in direct conflict. Gardner: Well Long Leaf, you mentioned Long Leaf-. But, don't believe it. So all of these things are clear in the past. Went out of business. Get this delivered to your inbox, and more info about our products and services. Despite his misgivings about the current state of the industry, Bogle remained a believer in index investing, and will be remembered as one of the true market pioneers. While maintaining some of the lowest fees in the business, Vanguard has grown its assets under management from $1.8 billion at its founding to $5.3 trillion as of September 30, 2018, making Vanguard the second largest asset manager in the world. You've gotta be kind of stupid. This has led to companies such as Vanguard and Charles Schwab, which are some of the most popular index fund providers, to own a sizable percentage of publicly traded companies. That means that managers of these funds don’t have to make decisions in what to invest in and simply track the index. And look at the cash flow they get. Do better than my neighbors. Bogle: Well, first, there's a lot of ego out there. Everybody will take their money out of the market-weighted index and put it into the valuated index, and then the opportunity will vanish. We had a bad ... when we finally broke up the Wellington Management Company into certain operating units and Vanguard took over the administration, we were going downhill. ", Realize that we had money pouring out, more money going out than coming in for 83 months. John C. Bogle, founder and former CEO of The Vanguard Group. "But as I complete this memoir, 'stay the course' is also a splendid rule for fighting our way through the inevitable ups and downs of the short spans of our existence on this Earth, and for enjoying a productive and honorable life well lived. Gardner: Do you believe that we will have a unified fiduciary standard or not? But you have ... actually it's sort of amusing. But, it's the change from a little, tiny organizational, embryonic organization, where there is a captain. You know, most of the jobs at Vanguard, some of the technology jobs require a whole lot of professional skill. There wasn't a liquidity problem. Bogle: Well first, you can match the index in a very casual way. The problem is that since index funds are passively managed, they may not help ensure good corporate governance by voting for company management or proposals that other shareholders oppose. It won't matter whether you have stocks or bonds or anything else. Well, hindsight is always 20/20. You know, nothing is a lead pipe cinch in this world. And then, make sure that they hire nice people. I find it to be a great thing, that you have minor lover's quarrels with thing that are happening at the company that you created. They're gonna grow with the cost of living. The Wellington Fund had been destroyed by our partners from Boston. Gardner: Awesome. They slip, they stumble. Jack Bogle, “the father of indexing”, died in January of 2019.He was the founder and chief executive of The Vanguard Group, and creator of the first index fund. And that dividend, if you look at the stream of dividends, it makes the stock market look violently volatile. See you at the top! And, that's obviously oversimplified. Gardner: Well there are a lot of nuts out there though, right? Gardner: Oh we're gonna ... no. But older, maybe 25 percent equities and 75 percent bonds, something like that. "Whatever you want Mr. So, obviously, you found people who are passionate about the principles. But, I'm just trying to tell it the way I see it. Now, I know what I can get. He wrote several books, including Common Sense on Mutual Funds, Bogle On Mutual Funds: New Perspectives For The Intelligent Investor, and Stay the Course: The Story of Vanguard and the Index Revolution. For example, an index fund following the S&P 500 would have to purchase stocks that are in the actual S&P 500 index. Most jobs can be done by intelligent human beings with a little experience and a motivation to do them. But I guess time will tell whether that plays out. Probably it will do better some of the time, I do not believe it will do better in the long run. Interview people. It used to be-, Bogle: It's actually much higher than that when you look at the cost of it.
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