Tag: active-vs-passive

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TALK OF A PASSIVE BUBBLE IS JUST HOT AIR

By LARRY SWEDROE

The active investment management community has been attacking indexing—and passive investing in general—for decades. The reason is obvious: its profits (and for many firms, their very survival) are at stake. The attacks began almost from the moment John Bogle started the First Index Investment Trust (later renamed the Vanguard 500 Index Fund) on December 31, 1975. At the time, competitors uniformly derided it, even calling it “un-American” and “Bogle’s folly.” Now-retired Fidelity Investments Chairman Edward Johnson was quoted as saying he couldn’t “believe that the great mass of investors are going to be satisfied with receiving just average returns.” One of the great ironies is that Fidelity is now one of the leading providers of index funds. It was also the first fund family to offer a zero-expense-ratio index-based ETF.

Continue reading at Evidence Investor right here: https://www.evidenceinvestor.com/talk-of-a-passive-bubble-is-just-hot-air/

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ETF Fear Mongering

by  | Aug 14, 2019 | ETFs

ETFs have existed for 26+ years.  That’s longer than a third of the U.S. population has been alive.  Through the Dotcom crash, the Global Financial Crisis, taper tantrums and more recently, a 20% market swoon in the back half of last year.  ETFs have aged well through it all.  But somehow, ETF fear mongering is still alive and well.

Continue reading at The ETF Educator right here: https://theetfeducator.com/2019/08/14/etf-fear-mongering/

 

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Debunking the Silly “Passive is a Bubble” Myth

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I received a number of questions about this headline and story from Bloomberg yesterday:

This stuff scares people because it’s coming from an intelligent investor who made a name for himself during one of the biggest market crashes of all-time.

Continue reading at A Wealth Of Common Sense right here: https://awealthofcommonsense.com/2019/09/debunking-the-silly-passive-is-a-bubble-myth/

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ETF Transparency And Liquidity Are Welcome In Stressed Markets

Summary

  • The shift from mutual funds to ETFs is a secular trend.
  • Claims that ETFs won’t work in down markets are loaded and obtuse.
  • Active asset allocation – using direct securities, funds or ETFs – is key to managing risk.
  • Transparency and liquidity of ETFs makes them a useful tool for implementing asset allocation decisions.

Continue reading this article at Seeking Alpha right here:  https://seekingalpha.com/article/4232900-etf-transparency-liquidity-welcome-stressed-markets

 

 

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I Told You Index Investors Were Smarter, 2008 Agrees

Summary:

  • Index investing and index funds get blamed for moving the markets higher as investors ‘blindly’ add new monies.
  • There’s more evidence that many of the Indexers stayed the course in the last major correction as well.
  • Those silly indexers, getting an investment plan and sticking to that investment plan.
  • As I’ve often suggested, the smartest investment style is likely to attract the smartest investors.
  • Have a read, we can learn a thing or two from 2008 and the performance of ETFs and Indexers.

Read the full article at Seeking Alpha right here:  https://seekingalpha.com/article/4207060-told-index-investors-smarter-2008-agrees

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Capital Flows to Where it is Treated Best: ETFs Have Treated Investors Most Excellently (repost)

“Capital flows to where it is treated best.” Many of you have probably heard this quote more than once, and should easily understand it, even if you don’t embrace it as a universal truth. I like this quote because it just makes good common sense. The quote is normally used in the context of macro-economics, but I believe it is equally valid in the realm of actively managed mutual funds, index funds and ETFs.

Continue reading “Capital Flows to Where it is Treated Best: ETFs Have Treated Investors Most Excellently (repost)”

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Swedroe: The Only Reliable Prediction

Another great article from Mr. Swedroe right here at ETF.com:

Swedroe: The Only Reliable Prediction

Fortune teller

New favorite Swedroe quote: “There’s one forecast I know I can make with the same certainty I have about the sun rising in the east. I know—for certain—that, at the end of each year, active managers will come up with an excuse for their failure to outperform index funds.”