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Jack Bogle, the Man Who Revolutionized Investing, Dies At 89 (marketwatch.com)
Thelasko shares a report from MarketWatch: You can thank Thomas Edison for the light bulb casting light in your home, Henry Ford for your affordable, mass-produced car, and Apple's Steve Jobs for the astonishing computer in your pocket. And Jack Bogle, who died Wednesday [at the age of 89]. The low-cost mutual funds he helped pioneer at Vanguard aren't as sexy or dramatic as other inventions. And you can't really touch or see them. But their effect on everyday lives has been enormous. Bogle's low-cost index funds, and the imitators they have inspired, may have saved ordinary Main Street Americans a staggering $250 billion, or more, in mutual fund fees over the last forty years. According to the Investment Company Institute (ICI), there are now about 450 index mutual funds with around $3.4 trillion in assets. There are also 1,800 exchange-traded funds, also with around $3.4 trillion in assets.
Neither did Edison invent the light bulb. Henry Ford can probably get a lot of credit for the modern assembly line. But, yeah, Jobs didnâ(TM)t invent anything.
Boring, low-cost mutual funds like the Vanguard funds are how about 10 million Americans have become millionaires. Mustn't they've held Vanguard or similar funds inside their 401K or other retirement plan. That's most millionaires.
Other interesting facts about millionaires:
33% of millionaires never made $100,000 in any year.
Most made less than $150K.
Millionaires are no more likely than the average American to have received any inheritance. (21% f people, and 21% of millionaires, inherit any money).
Less than 1% of millionaires made most of their money in one year, from a particular event. 99% consistently invested over the long term.
Most commonly held jobs of millionaires:
Engineer
Accountant
Teacher
88% of millionaires have a bachelor's degree, 52% have a graduate degree. About half are first time graduates - their parents didn't have a degree.
Of those will have a degree, most went to state schools rather than private schools, and 68% worked their way through school rather than taking out loans.
Except the actively managed fund "experts" aren't actually any better at predicting the market. After fees, actively managed funds underperform low fee index funds with similar investment goals two-thirds of the time. And no, that doesn't mean one-third of actively managed funds are better than index funds; the overperforming funds change each year, and over 10 year periods, and the index funds win over 90% of the time.
So your premise is that index funds are free riders benefiting from the research of more informed investors, yet if that were the case, they should, by definition, underperform the actively managed funds since the index funds should in theory be buying lower and selling higher (since the index funds are always riding coattails, as it were, buying after others buy, and selling after they sell). And all that money in index funds should, by your theory, be making informed investment choices even more lucrative. Yet that's not how it goes in practice. In practice, even as the fees on actively managed funds have gone down, they've continued to underperform the index funds. The only way your theory jives with reality is if the majority of the so-called "informed" investors, including professional fund managers, have no real idea what they're doing (Note: Not going to dispute that possibility).
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LOLZ yeah 240V bulbs in 120V supply:
Halve the voltage, get one quarter the power, and less than 10% the light output because of how filament resistance goes with temp.
you get a glowing night light.
For the last 100 years investing an (inflation-adjusted) $5000 per year into the S&P 500 yields between ~$768,000 and $2.2 million (in inflation-adjusted dollars) after 40 years, on average. So tell me how putting a few thousand per year into the stock market won't make me rich?