FYI: Jack Bogle’s passing is a timely reason to spend a moment considering the growth of index-based investing, an approach he spent much of his professional life promoting with great success. Like many of you, we have watched indexing go from curiosity (in the 1980s) to limited acceptance (the 1990s) to widespread adoption (now). In terms of his impact on capital markets, Mr. Bogle has few peers in this or any century.
As far as what we can add to a discussion of index-based investing, we have three points to share with you today:
Regards,
Ted
https://ritholtz.com/2019/01/we-come-not-to-praise-indexing-but-to/
Comments
Friends, Romans, countrymen, lend me your ears;
I come to bury Caesar, not to praise him.
The evil that men do lives after them;
The good is oft interred with their bones;
So let it be with Caesar.
The noble Brutus
Hath told you Caesar was ambitious:
If it were so, it was a grievous fault,
And grievously hath Caesar answer’d it.
Here, under leave of Brutus and the rest–
For Brutus is an honourable man;
So are they all, all honourable men–
Come I to speak in Caesar’s funeral.
Full text: https://www.poetryfoundation.org/poems/56968/speech-friends-romans-countrymen-lend-me-your-ears
What it buries are inconvenient facts. Such as index funds costing as much as 0.50% around 1980 (the start of one of the time frames used). And the oft repeated fact that one cannot invest directly in an index.
A more important fact, IMHO, that it ignores is that the rise in the use of index funds (and index ETFs) coincides with their use in wrap accounts. Those accounts charge the same 1% that the article is criticizing.
You do know that this is one of the alltime deft irony-laden audience-manipulating notice-giving orations (audiences are the plebes and the assassins). The repetition of 'honorable man' presages Puzo's writing for the Godfather.