BornInCA wrote:Hmmm. I wonder who is "dead wrong" here: Delegge? or Bogle?
baw703916 wrote:As a long term investor in ETFs, I don't consider it a problem that hedge funds invest heavily in them with high turnover. That lowers the bid-ask spreads!
I like the Vanguard Total Stock Market mutual fund, but if you want to buy the ETF version of it and hold it for a long, long time, up to forever, how could I argue against that?
The trouble is, when you buy something for the short term, or something that's concentrated as distinct from something diversified, that's really speculating, which is a loser's game.
Ketawa wrote:Vanguard has only one Emerging Markets fund
Brian2d wrote:I'm not opposed to ETFs, though I don't own any at present. An investor who chooses an ETF similar to Vanguard's for low cost, low taxes, and market diversification is likely making a sound choice.
However, the tone of Delegge's piece was clearly uncalled for, being far too extreme (waiting for end of day is not tyranny), and Bogle's response has far more good points than the initial article. That said, there are times when ETFs make sense for an investor, and the fact that Delegge makes a poor case for ETFs is not a reason to avoid theme necessarily.
I agree with Bogle that for the most part, Vanguard has chosen a sound implementation for ETFs, and has created vehicles which can provide value for investors while avoiding many of the purely speculative ETF's (such as leveraged indices) pitfalls. Assuming a customer understands the potential risk of a difference between ETF buy and sell price and its NAV (which in the case of broad indices is likely to be small) there's nothing wrong with such an investor choosing index funds.
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