Mutual fund legend and Vanguard founder Jack Bogle doesn't like exchange-traded funds, won't engage in international investing and disagrees with the basic philosophy of GOP front-runner Donald Trump.
At his annual conference outside Philadelphia, Bogle reportedly defended the index fund, which was designed to buy stocks in proportion to their market capitalization, not according to what a manager thinks will do well.
But he cautioned that index mutual funds were much safer than ETFs, which also track stock indexes,
the Street.com reported.
Unlike mutual funds, ETFs can be bought and sold like stocks all day long, which encourages investors to speculate instead of investing for the long term.
Exchange-traded Funds Can Be Dangerous
"ETFs have become the new way to speculate," he declared, even though many ETFs are in fact index-based. But Bogle said that ETFs often focus on narrow sub-sectors. "There's a lot of niche-seeking," he noted, with new ETFs debuting what seems like every day.
"There's a lot of junk out there."
International Investing Is Overrated
Bogle is "not on board with international investing," he said flatly. "I don't do international. I never have."
"If you invest in the S&P 500 (SPY), you own an international portfolio," Bogle said.
3 Bogle tries to impress on investors that average results are exactly what they should seek — market returns that have very low transaction costs and don't risk underperformance or a lack of diversification.
A Contrast With Trump
As far as basic philosophies, the two couldn't be more different, the Street.com points out.
"'Enough.' That's the title of Bogle's book urging readers to change their perspective and think about financial and personal success in light of what's enough, not in terms of trying to get more, more, more," the Street.com reported.
"'Never Enough,' by contrast, is the title of a new biography of Donald Trump by Michael D'Antonio. Trump's philosophy is exactly that, according to D'Antonio — the quest for more. More money, more visibility and now, in politics, more supporters," the Street.com reported.
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