Vanguard 50-year anniversary CEO letter

https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/of-investor-by-investor-for-investor-since-1975.html

by telotortium • 1 year ago

168 218 1 year ago

corporate.vanguard.com

martinky24• 1 year ago

This is basically just a marketing press release.

kfarr• 1 year ago

Yes but same with every other company blog post posted here

shartshooter• 1 year ago

My grandparents were children of the depression and encouraged me to invest in the vanguard 500 for as long as I could remember.

Once I joined the military and had a steady paycheck I started putting some money away each month. Fast forward twenty-something years and I’m so so so grateful to have had that influence which gives me optionally in my life.

No doubt investing with vanguard had a huge influence on their lives and I can’t imagine how many millions have been impacted.

Dollar cost averaging ftw!

jjice5• 1 year ago

As children of the depression, where did your grandparents get the knowledge to invest in the market? From what I've seen, lots of people weren't keen on the market after growing up through the depression. Good on your grandparents.

UncleOxidant5• 1 year ago

Agreed, that generation generally viewed the stock market as gambling and thus didn't tend to invest. I'm not sure I can blame them for coming to that conclusion after living through the Roaring 20s bubble and the ensuing Depression.

dmoy• 1 year ago

The way it worked for my grandpa, who also lived through the depression was basically this:

1. Living through the depression made him singularly focused on money, to the point where that's basically all he talked about

2. Throughout life, he tried everything to hustle money - normal job, individual stock tracking, index funds sure, but then also hustling collectibles at garage sales (especially rare coins, because, you know, they are also money), a wide ranging used car sales operation (he'd drive 10 hours cross multiple states to get a good deal on a car to flip), etc etc.

3. He also was pretty good with math (money is numbers), and wasn't dumb, so in the very long run he kept rough track, and realized that of all the things, index funds probably did the best, and also took like zero time. But at least he had his kinda fun doing it.

So when before I went to college (even at age 12), he'd call us up and tell us to go to a good but cheap state school, and study something like engineering that makes a good income.

So then after I graduated (from a good and cheap state school, with two engineering degrees, and also a CS degree), and got a real job, his phone calls changed to telling me to invest in the S&P 500 with as much as I could, and ignore crashes. (He would also call and try to predict crashes, some he missed (dot com), some of which he got right (2007-8), and some of which were basically fiction (2013, 2015).

So I lived like a monk for 5+ years and still live pretty frugally. I think the highest I've ever spent on my income is 50% of after tax, and it used to be more like 20-25% before house+kid.

On the plus side, working for a long time at a >50% savings rate means you're much more immune to short term work shenanigans like layoffs.

On the down side, you gotta resist buying new stuff all the time, which can be hard when there's lots of cool stuff.

UncleOxidant5• 1 year ago

My grandparents were children of the Depression and given their experience living through that they always considered the stock market to be gambling and thus never invested in the stock market. My parents absorbed that ethos and also never invested until they had to when they got a 401K (but they were well into their 50s)... then they liquidated their holdings as quickly as they could like they thought stocks were dirty, or something.

bluedino• 1 year ago

Even right now a lot of people retire and then liquidate their 401k

I just don't get it. My father and father-in-law both did it.

JoshTriplett• 1 year ago

If you needed the money immediately, that's an understandable reaction to the Depression.

If you did dollar-cost averaging through the Depression, and didn't have any immediate need to withdraw, you'd have come out of it doing pretty well.

coldpie8• 1 year ago

always considered the stock market to be gambling

I also feel this way, and all of the terminology and marketing around the stock market definitely reinforces this belief. I have my retirement put into one of those diversified retirement mutual fund things which I completely ignore, but other than that, I don't mess around with stock market stuff at all. The up & down junk, trying to decide when to buy or sell, all that stuff makes me feel terrible. Same feeling as going to a casino. Not my kind of fun. I don't want anything to do with it.

BurningFrog• 1 year ago

It is gambling, but the kind where the odds are in your favor!

swatcoder• 1 year ago

Market/fund investment for us normal folk is so passive and disempowered that it really does amount to gambling. You put some share of your hard-earned wages in and hope for the best.

It's been shown to be a mostly rewarding strategy over the last century of so, averaged out at least, and so of course it's not really a foolish bet for most folks, but it's not the only way to secure one's financial health and isn't the ideal one for everybody.

Scrappy hustlers, skilled trade workers, and (SMB-scale) entrepreneurs in particular can often see a better return by investing in themselves and in ventures in their own community, where things are not so passive. Likewise, people with modest dreams and a preference for stability often might prefer securing a paid off house, car, etc before throwing too much money into the casino -- even on good bets. And others with strong and healthy family bonds benefit most by prioritizing enrichment and opportunity for family members who can be trusted to return the favor in less flush/capable times. etc

Many young people have only really been exposed to the idea of market investment as a retirement strategy, and its a good one for many, but there are a lot of roads to staying financially healthy through late life.

wiredfool• 1 year ago

My Grandfather was young during the Great Depression, and his relationship with money was much different than I can imagine. His idea of diversified investments was cash in several different banks. He just didn't spend money if he didn't have to -- to the point of not wanting to get a cordless phone (which could be carried in his walker) because he had a perfectly good wired one in the phone nook.

When he died in his 90s, his car was the one he bought to visit my parents when I was born.

giantg27• 1 year ago

They aren't wrong. It kind of is gambling, depending on how you do it. Even if you do it the smart way there's still some small risk. That's why the fine print on any perspectus says you could lose all of your investment.

kccqzy2• 1 year ago

My parents did quite a bit of "investing" by stock picking when I was little. That didn't work well and I didn't invest anything at all for quite a bit of time. One day I by chance discovered the /r/personalfinance subreddit and the bogleheads forum and that's when I started investing. Dollar cost averaging ftw indeed.

kccqzy2• 1 year ago

I had a brain fart while writing this comment. I meant to say "indexing ftw" (and also that appears to be the main innovation of Vanguard).

wing-_-nuts9• 1 year ago

Yep, you would be shocked at what a high savings rate and consistent investing can do for someone, even without ever earning a FAANG salary. Being financially comfortable takes so much stress out of life.

traceroute66• 1 year ago

I started putting some money away each month

To be honest, the positive of your story is less Vanguard, more this. You probably benefited more from old-fashioned compounding than Vanguard itself.

Too many people, sadly, don't put some money away each month.

They spend, and then they spend some more on credit, spending beyond their means.

Yes, of course, there will always be people who genuinely live paycheck to paycheck due to whatever reason.

But for people with a stable, reasonably well-paid job, its almost criminal not to put some money away each month.

loire280• 1 year ago

Living below your means and saving is absolutely important, but the Vanguard-style index fund is what made the compounding you mention available to the general public. Without that investment vehicle, cash saved would lose value relative to inflation or be subject to a lot more risk, making retiring at a reasonable age much harder.

jjice5• 1 year ago

Jack Bogle probably did more for the average American investor than anyone else in history (maybe barring economic policy or something). His book [0] on the history of Vanguard, it's founding, and their growth is just a fantastic read.

They really did feel like this bastion of customer focused passive investing in the brokerage industry for a _long_ time. They eventually helped seriously popularize index funds to the point where every major firm offers a low cost index fund, because they have to to compete. They continued to lower their fees whenever they could to the point where VTSAX is .04% (with their ETFs being even lower).

He even turned down an offer to create the first ETF (I forget the guy that brought the idea to him), but he explained the idea to Bogle and Bogle politely declined because he thought that having the ability for intraday trading went against the Vanguard model of set and forget passive investing. That guy eventually went to the firm that runs SPY, if I recall from the book. They eventually began offering ETFs, obviously, but Bogle was always more of a mutual fund guy from the way that book puts it.

Bogle really seemed to be for the people. The man was wealthy, but not nearly as wealthy as he could be because they continued lowering fees. Their mutualized fund structure is also a massive part of that.

After he left Vanguard, you saw more traditional brokerage offerings - more active funds and more pushes for offer advisors to you over the phone. If I recall, Bogle expressed some displeasure in that.

You can tell I'm a Bogle fanboy, but I'll gladly wear that badge.

[0] https://www.goodreads.com/book/show/42938221-stay-the-course

avree2• 1 year ago

The guy's name being John, but his nickname being "Jack", always confuses me.

jjice5• 1 year ago

Don't quote me on this, but I believe that Jack is a pretty common nickname for John, at least based on the John/Jacks I've met in my life.

bklyn11201• 1 year ago

I would love to hear from a Vanguard employee on their tech challenges, e.g., why is the client web interface significantly worse than competitors? Or is it purposeful? E.g., slow down, trade less?!

jjice5• 1 year ago

I actually like their revamp a lot (last few years?). They have a million subdomains they send you around which is weird, but I don't mind the current UI. Sometimes they still send you to an old page though, like for scheduled investments (if I recall). What are the parts that irk you, out of curiousity?

I think Fidelity's Net Benefits (which I believe is distinct from the personal site) is pretty bad though.

sea-gold2• 1 year ago

Not the OP, but besides the subdomains, it feels like each section/UI/subdomain was designed by a different team. The overall interface doesn't feel cohesive (to me).

bradfa3• 1 year ago

I HATE the new web interface. It's significantly slower, shows less useful information, and has many more times where it just doesn't work as compared to the old web interface. If there was an option to go back to using the old web interface fully, I would sign up for that immediately.

For an example of a thing I hate about the new web interface is trying to buy a stock. You end up in some different part of the website where after you place your order it shows you a differently formatted order status page than the normal order status page. There's an Exit button at the top. Pressing the Exit button will pop up asking if you want to leave because you'll lose all your unplaced orders, of which you have none because how you got to the Order Status page was by fully placing an order. It's confusing for no reason.

candiddevmike• 1 year ago

In my experience, every brokerage UI is dripping with tech debt. You can see all of the layers of paint put on over the years on top of some old ass legacy system underneath it all. You click around enough and find 2000s UI elements still in most of them.

psanford• 1 year ago

Vanguard is one of the few financial institutions that supports webauthn.

lokar2• 1 year ago

But you still can’t turn off sms fallback? Or can you now?

breadwinner• 1 year ago

The worst aspect of their web interface is poor information density. Take a look at this page as an example: https://investor.vanguard.com/investment-products/mutual-fun...

SomethingNew712• 1 year ago

There has been an immense push to modernize the Vanguard site and the underlying architecture. This has been an enormous effort over multiple years. Since Vanguard was always a "no-branches" company, it's always been web-based. So, as a result, much of the site was built at the "bleeding edge of the time" but they are now in a position where that needs to be fully modernized.

Vanguard's architecture is enormous, but they are getting closer and closer to fully modernizing the site and retiring legacy completely. Its something that has been happening and will continue to happen over the next few years.

no_wizard11• 1 year ago

Not an employee, but the reason I ended up not using them is because when I went to sign up, due to having a 401K account with them via a previous employer, I had to call their customer hotline, and their customer representative wanted alot of sensitive information over the phone - including giving them a password for my account.

I refuse to do business with a company with that shoddy of security practices. There's no reason what the representative was doing couldn't have been done online through a secure portal that respects my privacy, but alas, it could not.

I went with Fidelity. Its been great. Though all these brokerages have their pros and cons, I groked the setup at Fidelity pretty fast.

xvilka• 1 year ago

The Futu[1] has amazing trading interface, native app, no Java (looking at you, Interactive Brokers), for all desktop systems as well as mobile ones.

[1] https://www.futunn.com/en

bix66• 1 year ago

Do we think index funds will continue to be this financial savior for regular people in the future?

On the one hand total market index exposure is fantastic.

On the other it’s accumulating more and more with a few firms giving them exceptional power.

Does this unravel at some point? It’s hard to think the index itself could go bad but perhaps everything behind the scenes could fall apart?

spencerflem• 1 year ago

It seems like it has to at some point. Things have been so unsustainable for so long

eadmund• 1 year ago

On the other it’s accumulating more and more with a few firms giving them exceptional power.

I think that the next step will be for individual investors to instruct that their shares be voted according to certain guides. And then the step after that will be for large index investors to be able to directly vote their shares.

TechDebtDevin• 1 year ago

The system is designed to only let one or two dominoes fall at a time.

pipes• 1 year ago

What is the evidence that it has been designed this way?

walthamstow• 1 year ago

The book 'Trillions' by FT journo Robin Wigglesworth is very good on this subject

bix66• 1 year ago

Anything stand out to you? I’ll add it to the list but in the meantime I found these points from Chat interesting.

3. Impact on Corporate Governance

With substantial holdings across numerous companies, major index fund providers possess significant voting power in shareholder decisions. Wigglesworth discusses the implications of this influence, questioning whether these firms can effectively oversee corporate management without the traditional incentives that drive active investors.

4. Systemic Risks and Market Stability

The author also examines the potential systemic risks posed by the dominance of index funds. He explores scenarios where market shocks could be exacerbated by the passive nature of index investing, potentially leading to increased volatility and reduced market resilience.

amanaplanacanal2• 1 year ago

I think I'd still recommend index funds and real estate for a young person today. Buy the biggest house you can reasonably afford, and invest every spare bit of money you have in an index fund. Do everything you can to move from the worker class to the capital owning class, because that's where the returns go. And inflation isn't going away.

In theory, capitalism could fail completely. In theory, governments could stop inflating their currencies. I sure wouldn't bet that way though.

whitepoplar• 1 year ago

why "the biggest house you can reasonably afford"?

hollerith2• 1 year ago

"Inflation isn't going away" is an argument against holding cash, but since salary increases have kept up with inflation, how is it an argument for "move from the worker class to the capital owning class"?

no_wizard11• 1 year ago

Buy the biggest house you can reasonably afford

You should really look at real estate one of two ways when buying.

Either you're buying a home and you live there. Its unwise to treat that in the same vein as index funds. While its definitely an asset, the mindset of living vs investing in something isn't the same, and I recommend not conflating the two.

On the other hand, if you buy real estate as an investment you should remove any thoughts about it being a living space for you and/or your family. At that point, it should be seen as something you'll rent out to others (primarily the best way I currently have found to turn a profit on investing in real estate) or doing more speculative house flipping ventures, home builds etc.

I don't really think this blanket advice is the best advice. I do think its important to own your home - simply because of how society is structured, it heavily favors home owners, plus rent is simply lining someone else's pocket, where as eventually owning a home free and clear removes a major liability from you life. To simply buy the 'biggest you can reasonably afford' could land one in a bad place

dowager_dan993• 1 year ago

Real Estate in Canada is interesting. We invest way more of our wealth in it than Americans, yet many can't afford to get started with their first purchase. Somehow the government needs to get more people into houses without destroying the nominal value (i.e. triggering big price decreases). I suspect they'll focus on supply and programs to help people pay the high list prices, but not try and control what a home costs directly. Inflation can then solve some of the real volume problem, but with a lot of knock-on impacts and also push it down the road. Tough scenario to try and address...

wing-_-nuts9• 1 year ago

Buy the biggest house you can reasonably afford

Strongly disagree with this. Buy the house you need, and only if you intend to stay there at least 5 years.

On the one hand I acknowledge the US tax code and housing policy encourages home ownership, but on the other, you're completely discounting the utility costs, maintenance / reno drag, and transaction costs that come with owning more home than you need.

While I was moving every year or so for new opportunities, I happily rented. When I moved to a local tech hub where I felt I could put down roots? I happily bought, but I only bought what I needed.

I saw a lot of classmates buy a home prematurely, and effectively be 'stuck' looking for work in the same small job market their whole career, where moving really helped mine.

turtlemir• 1 year ago

I don't think you're wrong in your advice to build wealth, but the situation I see the working class in doesn't sit well with me. And building a society were the prime directive of life is buying property and stocks seems doomed.

I see the situation as this: The middle and upper-middle class have become invested in a perpetuating a system that ultimately will strangle them or their descendants.

Wealth begets wealth, power begets power. It might be a law of nature that things like to polarize. Likely we'll see a return of society consisting of two groups: rich and powerful, poor and powerless.

Most older engineers I meet seem to associate with the mindset and politics of billionaires and multi-millionaires, and see themselves almost in the same club sometimes. I guess making a lot of money does that to people. Add to that the truth expressed by Steinbeck about the USA "The poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires."

I think we have a problem where housing and stocks must continue to make return on investment. Housing prices must keep raising, hurting the next generation. Young people increasingly don't have the luxury of job stability to buy a home. Companies must keep increasing profit, leading to offshoring, outsourcing, stricter working conditions. And now middle class government jobs must be cut and privatized so that capitalists can make profit on providing a service. All the while the top percent owns and increasing share of the wealth pie.

I felt I needed to reply because while what you are saying is the way things are, I wish it didn't have to be that way.

davidw• 1 year ago

It feels like after living through the great recession, a pandemic, incipient authoritarianism, that that system unravelling is exactly the kind of thing that could fall apart on some of us when we near our retirement years.

MangoCoffee• 1 year ago

Do we think index funds will continue to be this financial savior for regular people in the future?

why not? its an basket of stocks. correct me if i'm wrong but in the long run, index beat out stock picking.

i did some stock picking just for fun. two of my picks that i put real money into end up badly that i lose money.

entuno4• 1 year ago

One of the key ideas behind the stock market is that is allows capital to efficiently allocated - perform well and have good potential more people buying their shares, and companies that perform badly or have poor potential get fewer. So money should go towards more productive companies, although how well this works in practice is debatable.

Passive investment breaks that approach, because you're basically buying shares in every company in an index, regardless of its performance or future prospects.

And if passive investment is 1% (as it was back in the 90s) of the market then that's not a big deal, because most of the investment should still be based around performance and productivity. Nowadays its more like 50% - but what happens when that gets even higher? Does the stock market still work effectively if 90% of the money is just blindly invested without any regard of individual company performance or merit? 99%? 100%?

I don't know. But we may well reach a point where the inefficiency of passive investment creates serious problems.

DebtDeflation• 1 year ago

It unravels when unemployment spikes and all of these automatic 401k contributions stop and eventually reverse as the unemployed start draining their retirement savings to survive.

bix66• 1 year ago

That sounds like a general stock market unwinding not necessarily the index system breaking down?

parpfish2• 1 year ago

what happens in a theoretical market where 100% of investors were in an index funds?

companies lucky enough to be listed in the S&P or whatever would get a huge influx of cash, but their actual quarterly performance wouldn't change whether people buy/sell their stock because people aren't picking and evaluating individual companies. so... what would determine their price?

neogodless• 1 year ago

Unless this theoretical market prevents individual investment, anyone who has opinions on any company being over- or under- valued would then be able to take advantage of the passive investors and make a lot of money buying and selling. And this would affect the price.

But then it's no longer your theoretical market that is 100% passively invested.

dowager_dan993• 1 year ago

probably way more efficient as only a small group of the base index funds are doing company-by-company evaluation? If we contrast the sub-prime mortgage crisis where repackaging mixed in more and more dogshit every time, this feels like the opposite.

wing-_-nuts9• 1 year ago

what happens in a theoretical market where 100% of investors were in an index funds?

That would never happen, because the more a market tilts towards index investing, the larger the incentive and opportunity that active management has to exploit misspriced assets. The trick is that the very act of exploiting that opportunity updates the price and eliminates it long term, and the harder it becomes for active investors to find misspriced assets.

TLDR: Active managment effectively performs a service to the market, and gets rewarded for it, but the reward is small and fleeting

psunavy038• 1 year ago

It's not being "lucky enough." It's based on market capitalization.

wing-_-nuts9• 1 year ago

Do we think index funds will continue to be this financial savior for regular people in the future?

I've never argued that there are not market inefficiencies that can be exploited by active managers, but the twist is the very act of exploiting those opportunities quickly eliminates them. Thus why it's so hard for an active manager to beat index funds long term. If you're worried about a few high market cap companies dominating stock indexes, you could always tilt towards small cap value. That sector has under performed for decades, but every dog has it's day.

toast04• 1 year ago

In the time since Index Funds were created, retail trade commissions have gone to zero and fractional share trading has become mainstream possible.

If it becomes untenable to trust firms to manage index funds, it would be possible , if onerous, to replicate at least a S&P 500 in a retail brokerage. There's a lot of nice things the fund does to earn their 0.03% expense ratio that you'd miss out on, especially convenience; but you'd also be able to vote your shares as you wish for all that that's worth.

The indexes themselves I don't think can stray too far from their mission, or funds will throw a fit, S&P 500 index consideration is nearly a mechanical judgement. At the tail end of companies on the 'all market' type indexes, there's perhaps room for shenanigans that could be material for those doing the manipulation, but given the realities of a market value weighted index, it won't make much difference to those following the index if an inappropriate company is added to the index and followers have to spend 0.001% of their fund on it.

crazygringo2• 1 year ago

On the other it’s accumulating more and more with a few firms giving them exceptional power.

Which firms are you referring to? Firms like Vanguard or firms like Apple?

I don't really see how Vanguard gets "power" here. They have no choices. They can't deviate from the index, so the money they control doesn't give them "power" to affect anything.

Or if you mean firms at the top of the index like Apple, they owe their power to their competitiveness and profit-making ability. I don't really see how inclusion in indexes inflates their power, except in an arguably slightly higher stock price. But it's not allowing them to engage in "powerful" behaviors they wouldn't otherwise. Apple isn't buying up companies it wouldn't if it weren't in index funds, for example.

entuno4• 1 year ago

Vanguard do still have a lot of control by choosing their investments, because many of the people investing through them are buying blended funds rather than ones invested in a single index. For instance, if you look at funds like the LifeStrategy ones (which you'll commonly see recommended online by people), it's made up of lots of different funds:

https://www.vanguardinvestor.co.uk/investments/vanguard-life...

So while they can't easily pick and choose which S&P 500 stocks they include in a fund like that, they can decide if the S&P 500 is 1% or 10% or 50% of what that fund invests in. And given the total amount of investments they have, if they decide to move towards or away from certain countries/indexes/etc that could have a significant impact.

lambertsimnel• 1 year ago

I don't really see how Vanguard gets "power" here. They have no choices.

They do have voting rights in companies that are part of the index. In my judgement, that's the more reasonable interpretation of the GP's point.

On the other hand, the more of the market held in index funds, the less is available to active investors to perform their valuation service, as described elsewhere in this discussion.[0]

[0] https://news.ycombinator.com/item?id=43859024

lr4444lr2• 1 year ago

perhaps everything behind the scenes could fall apart

The problems in the world that would result in the entire top line public companies falling apart that make up the TSM or even S&P 500 fall apart protractedly - not like a few companies getting knocked out and replaced by others but the _entire concept_ failing - would be of such magnitude that people's retirement savings would probably not be the 20th thing on their list to worry about. Look at how COVID even at its worst could barely knock things down more than 25% or so for a few months.

bix66• 1 year ago

I’m less concerned about all the companies failing and more concerned about the implications of an index itself that is managed by a few titans.

pm90• 1 year ago

My prediction is that index funds will become even bigger as investing is opened up to populations outside of the west. Its likely that most of the economy will be fairly automated and steadily rising unless we face major worldwide shocks (World War, plague, environmental catastrophe etc)

RivieraKid2• 1 year ago

I recently learned that index-following ETFs have a mildly concerning problem that could be equivalent to an annual fee approaching 1%. It's caused by rebalancing that happens by, for example, stock buybacks or equity raises, which typically happen when the trade is beneficial for the active investor side of the trade. See latest video on Ben Felix's channel.

sea-gold2• 1 year ago

https://www.youtube.com/watch?v=mqIHa6URUPk

wing-_-nuts9• 1 year ago

Yeah, I saw that video. IMHO it's much more of a problem with smaller indexes. If you buy total stock market (VTI) just how often is a company going to be moving in and out of that index?

I noticed he didn't really have much in the way of suggestions for the individual beyond suggesting DFA funds. Given those aren't easily available without signing up for their advisor services, I am deeply skeptical that the savings would be enough to pay for their fees.

lokar2• 1 year ago

Also, Aiui, for a very large index like VTI and fund admins have some flexibility for inclusion and weighting. They look out for obvious problems and try to adjust a bit.

RivieraKid2• 1 year ago

It's not just company being added or removed from the index but also company selling new shares or buying existing shares.

kblissett• 1 year ago

Dimensional U.S. Equity Market ETF (DFUS) is an ETF freely tradable by many brokerages.

EE84M3i• 1 year ago

Is there an explainer available that isn't in the form of an 18 minute video?

d_burfoot• 1 year ago

I love Vanguard, and I would like see more companies like them. They offer a great service to millions of people, manage vast amounts of money, but the top leaders are not multi-billionaires.

nknealk• 1 year ago

Vanguard regularly pushes the envelope on cutting fees for investment products. In 2025 they reduced their fee structure by 350M (1)

(1) https://corporate.vanguard.com/feecuts

ijustlovemath• 1 year ago

I wish vanguard would release a 0-fossil fuels fund. I'd buy it in a heartbeat

jeffdn• 1 year ago

VGT is 0% fossil fuels, ESGV is 0.54%.

solatic3• 1 year ago

I find the number of people in this thread with views against index funds to be disturbing.

When you invest in an American stock market index fund, you get a highly diversified financial instrument at a fee that is so low that it is nearly free. You're buying into the proceeds of the strongest cultural force that is stronger in America than anywhere else in the world: greed. The force underlying your investment is that every CEO of every public company in America is working to make you richer, because if they succeed at making you richer, they've made themselves much richer in the process. You are investing in the greed of thousands of public company CEOs. When their greed pays off, you get paid off.

No American president, least of all Donald Trump, is going to stop the raw power of American greed, and that's not going to change without some kind of religious revolution of morals in a country that has become increasingly less religious over time.

tekla• 1 year ago

I've talked to bunch of people who seem to hate stocks in general.

It really feels like a bunch of people think the stock market is completely fake, gambling, and anyone who invests is directly contributing to strengthening capitalism, which is bad

The fact that like 60-70% of Americans have direct exposure to markets through IRAs and 401k's and benefits incredibly from it is an anathema.

some_random• 1 year ago

I think a huge part of the problem is people's conflation of individual stock investment (which is risky), option trading (which is often gambling in the worst meaning of the word), and investing in mutual/index funds.

alecco• 1 year ago

The people who destroyed value investing brag about their bubbles.

fancymcpoopoo• 1 year ago

Are index funds the biggest amoral pyramid scheme in existence today? It’s incredible how the prevailing advice is to indiscriminately contribute to the largest profiteering organizations. Its like encouraging everyone to go to college. No way it'll go tits up when time to retire.

georgeecollins• 1 year ago

I think you are making the argument-- poorly formed, frankly-- that if indexed investments become a big enough share of stock investing it will drive up the price beyond the fundamental value of equities more so than just investing individual equities.

The stock market response to "liberation day" implies that stocks don't all move together as you would expect if indexing was driving everything. Certain FANG stocks did very poorly, some mid cap or European stocks did great. The market is still trying to respond to the perceived actual value of companies, not just the expectation that more indexes will pile in and buy.

If people over invest in anything, including equities, the return on those investments will decline and bubbles will form. That can happen with the purchase of selective equities or with indexes. What Vanguard has done has probably not changed the market as much as lowering the cost to participate in it.

bearcobra• 1 year ago

I'm deeply worried about the number of people I see online who don't understand what Vanguard (or Blackrock, State Street, etc.) do and develop conspiracy theories instead. I think it presents a real risk for ETFs going into the future.

soupfordummies• 1 year ago

Oh thanks for the new rabbit hole. I took a peek inside and it seems to be:

Since they have so many shares of so many companies, they are secretly the shadow owners/operators OF all those companies.

akimbostrawman• 1 year ago

ESG scores and similar have a very real and visible impact. Maybe if you are that worried instead of calling them all conspiracies you could actually address them.

nly• 1 year ago

They've completely lost my business here in the UK.

They are no longer the cheapest UK ETF or fund provider in any category, and their Vanguard Investor platform isn't the cheapest either.

Vanguard 50-year anniversary CEO letter

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