John Bogle, Vanguard’s founder and a long-term advocate of buying and holding has recently expressed some concern about the proliferation of exchange traded funds. In an MarketWatch article today Bogle was quoted as saying that money is pouring into ETFs for the wrong reasons. And "performance chasing" hasn’t helped most investors who tend to be "their own worst enemy".
"Some ETFs are seeing investor turnover at a rate of 300% to 400% a
year," Bogle said on financial-news network CNBC. On the other hand,
index funds are designed to held "for a lifetime," he said.
I’ve got all the respect in the world for Mr. Bogle, but he needs to give investors a little more credit. Sure, some investors will shoot themselves in the foot with ETFs, but they’ve been able to do that with stocks for years.
Chip Hanlon of Delta Global Advisors feels "Bogle’s legacy in this industry
is no doubt secure, but… (has) that uncomfortable feeling of watching the once-great football
coach whom the game has quietly passed by."
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.