If index funds didn't exist, what would you do?
If index funds didn't exist, what would you do?
Hi,
Well thank heavens for Jack Bogle & Vanguard so we don't have to really consider this. But without them, what would you do? Buy the Dow 30 and a bunch of bonds? This was the case back in the 60's and time immemorial before that. Don't forget not all countries have the massive diversification of the US so they still have this exact same issue.
rgb73
Well thank heavens for Jack Bogle & Vanguard so we don't have to really consider this. But without them, what would you do? Buy the Dow 30 and a bunch of bonds? This was the case back in the 60's and time immemorial before that. Don't forget not all countries have the massive diversification of the US so they still have this exact same issue.
rgb73
Re: If index funds didn't exist, what would you do?
I would do what I did when there were not many index funds around: I would buy no-load, low-expense-ratio actively-managed funds. Examples would be CREF stock fund and Vanguard Windsor II. My biggest actively-managed holding is Vangaurd GNMA fund.
Re: If index funds didn't exist, what would you do?
If airplanes didn't exist how would you go to Europe?
Victoria
Victoria
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Re: If index funds didn't exist, what would you do?
If computers did not exist, how would you do spreadsheets?
Victoria
Victoria
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- Phineas J. Whoopee
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Re: If index funds didn't exist, what would you do?
If I was smart, I'd invent them.
PJW
PJW
Re: If index funds didn't exist, what would you do?
If women did not exist ... Oops, a wrong forum.
Victoria
Victoria
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Winner of the 2015 Boglehead Contest. |
Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
Re: If index funds didn't exist, what would you do?
"If women did not exist"
I'd be very sorry.
Index (or active) funds. Sorry. It doesn't do it for me.
Lev
I'd be very sorry.
Index (or active) funds. Sorry. It doesn't do it for me.
Lev
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Re: If index funds didn't exist, what would you do?
I wouldn't be here to comment on this forum, But then, neither would you.VictoriaF wrote:If women did not exist ...
Victoria
But if index funds didn't exist I' d probably still be working instead of retired for 14 years, stuffing money into low interest bank accounts and cds, and losing my shirt on expensive financial managers and individual stocks.
Last edited by cheese_breath on Sun Nov 24, 2013 4:52 pm, edited 1 time in total.
The surest way to know the future is when it becomes the past.
Re: If index funds didn't exist, what would you do?
There's always 7-11's...
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Re: If index funds didn't exist, what would you do?
I'm sure you already know, Victoria, but I think it's an interesting historical question with respect to the proliferation of personal computers so I'll expound a bit. Thanks for giving me the opportunity to, well, not so much listen to myself talk, as watch myself write.VictoriaF wrote:If computers did not exist, how would you do spreadsheets?
Victoria
Spreadsheets used to be sheets of paper. You bought pads of them at the office-supply store. There were little ones, medium-sized ones, and very large ones one used on tiltable drafting tables while not actually drafting on them (yes, there used to be people with the job title of drafter, and they used mechanical (!) pencils and rulers and straightedges and templates and compasses and wrote everything in block capital letters - by hand). Probably there were also truly enormous spreadsheet pads for vast projects like, for example, aircraft design, but I never saw those at my local stationary shop. Oh, yes, sorry, stationary used to mean things beyond greeting cards.
People filled in the fields in spreadsheets, and then used calculators to compute the numbers. No, I do not mean pocket calculators, nor even desktop calculators. Calculator used to be a job title, just like drafter. People were employed to do arithmetic. That was their job. Smart employers assumed an average error rate, just like for typists.
Yes. I said typists. People used to have that as a job title.
Anyhow, personal computers were all very good and such, for people who liked to tinker or wanted to play Adventure, but served no good business purpose (other than saving paper and time for typists who could correct errors without retyping an entire sheet of paper) until, wait for it, Lotus 123 came out. It was a virtual spreadsheet. You told it what arithmetic to do, and it did it! Nobody needed calculators anymore (which admittedly, by that time, were pocket calculators). It was the killer app before anybody invented the expression killer app.
Everybody who was anybody needed a personal computer at work for spreadsheets. That's how you could tell they were anybody.
The only personal computer thing I'm aware of which is remotely similar is local area networks. They were implemented on personal computers so businesses could have shared printers, rather than one per user which was kind of expensive. Meh.
Then somebody implemented email for personal computers.
The rest, as they say, is history.
PJW
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Re: If index funds didn't exist, what would you do?
I come from an alternate reality where index funds indeed don't exist. There investor returns are diminished by higher fees. On the positive side, there are no SDTs there, so people mess around more. So at least we got that going for us... which is nice
Re: If index funds didn't exist, what would you do?
Dear Phineas J. Whoopee,Phineas J. Whoopee wrote:I'm sure you already know, Victoria, but I think it's an interesting historical question with respect to the proliferation of personal computers so I'll expound a bit. Thanks for giving me the opportunity to, well, not so much listen to myself talk, as watch myself write.VictoriaF wrote:If computers did not exist, how would you do spreadsheets?
Victoria
...
The rest, as they say, is history.
PJW
May I call you Phineas? Thank you for the most fascinating delivery of history. I hope you have more occasions to watch yourself write.
Victoria
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Re: If index funds didn't exist, what would you do?
Alternate acronyms too, it seems.solonseneca wrote:I come from an alternate reality where index funds indeed don't exist. There investor returns are diminished by higher fees. On the positive side, there are no SDTs there, so people mess around more. So at least we got that going for us... which is nice
PJW
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Re: If index funds didn't exist, what would you do?
Just don't call me late for dinner.VictoriaF wrote:...
Dear Phineas J. Whoopee,
May I call you Phineas? Thank you for the most fascinating delivery of history. I hope you have more occasions to watch yourself write.
Victoria
PJW
Re: If index funds didn't exist, what would you do?
A call is an option. As well as a put.Phineas J. Whoopee wrote:Just don't call me late for dinner.VictoriaF wrote:...
Dear Phineas J. Whoopee,
May I call you Phineas? Thank you for the most fascinating delivery of history. I hope you have more occasions to watch yourself write.
Victoria
PJW
Victoria
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Re: If index funds didn't exist, what would you do?
Eating, on the other hand, is not.
PJW
PJW
Last edited by Phineas J. Whoopee on Sun Nov 24, 2013 5:33 pm, edited 1 time in total.
- bertilak
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Re: If index funds didn't exist, what would you do?
I would do what I'm doing now: Use Wellington and Wellesley.
Last edited by bertilak on Mon Nov 25, 2013 6:33 am, edited 1 time in total.
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Re: If index funds didn't exist, what would you do?
I agree that low cost active is a better option than individual stocks/bonds.
If no mutual funds, then individual stocks/bonds/real estate etc.
If no mutual funds, then individual stocks/bonds/real estate etc.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy |
4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
Re: If index funds didn't exist, what would you do?
Wellesley or/and Wellington.
Re: If index funds didn't exist, what would you do?
If you are implying jack bogle or vanguard invented index funds, then you are mistaken. They certainly popularized it. Credit should go to GMO's Granthamrgb73 wrote:Hi,
Well thank heavens for Jack Bogle & Vanguard so we don't have to really consider this. But without them, what would you do?
rgb73
Re: If index funds didn't exist, what would you do?
Good answer.bertilak wrote:I would do what I'm doing now: Use Wellington and Wellesely.
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Re: If index funds didn't exist, what would you do?
Credit is shared. There was no divine moment of creation of index funds. The idea was developing in the world, and many contributed.Ranger wrote:If you are implying jack bogle or vanguard invented index funds, then you are mistaken. They certainly popularized it. Credit should go to GMO's Granthamrgb73 wrote:Hi,
Well thank heavens for Jack Bogle & Vanguard so we don't have to really consider this. But without them, what would you do?
rgb73
The First Index Mutual Fund
PJW
Last edited by Phineas J. Whoopee on Sun Nov 24, 2013 7:39 pm, edited 1 time in total.
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Re: If index funds didn't exist, what would you do?
"Ahhh...a great smile to my face. Love the remark. Thx. V"VictoriaF wrote:If airplanes didn't exist how would you go to Europe?
Victoria
Re: If index funds didn't exist, what would you do?
I'd have a lot more shares of Dodge and Cox Stock and International than I do now, and I'd open a big position in Dodge and Cox income.
Royce Total Return or something similar for small value.
Royce Total Return or something similar for small value.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
Re: If index funds didn't exist, what would you do?
If index funds didn't exist, we would need a Bunglehead forum.
Victoria
Victoria
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Re: If index funds didn't exist, what would you do?
If index funds didn't exist, I would create them (just as Jack Bogle did).
Re: If index funds didn't exist, what would you do?
If women did not exist, all the money in the world would be useless.VictoriaF wrote:If women did not exist ... Oops, a wrong forum.
Victoria
Re: If index funds didn't exist, what would you do?
I suspect many of us would do what my father-in-law did: buy good dividend-paying blue chip sticks and hold them forever. And perhaps individual municipal bonds. That, pretty much, was what "our types" did before low cost index funds and before the understanding of asset allocation. And it worked pretty well.
Re: If index funds didn't exist, what would you do?
When I started investing I didn't know anything about indexing, but I did get a good tutorial on loads and expenses from Consumer Reports. So, as an earlier commenter said, I'd probably have more funds in Dodge & Cox than I have now.
Re: If index funds didn't exist, what would you do?
I have been retired 17 years and have not used index funds. I used/use no load mutual funds: Mutual Shares, Janus funds, Wellington Fund.. all turned out just fine. Except Max Heyne and Michael Price sold their funds and retired. A few other funds and stocks bought and sold over the past 40+ years. Assets have never been higher...
investor
investor
Re: If index funds didn't exist, what would you do?
Mutual Shares was the first fund I ever purchased back about 30 years ago. Classic.investor wrote:I have been retired 17 years and have not used index funds. I used/use no load mutual funds: Mutual Shares, Janus funds, Wellington Fund.. all turned out just fine. Except Max Heyne and Michael Price sold their funds and retired. A few other funds and stocks bought and sold over the past 40+ years. Assets have never been higher...
investor
(And I had quite a few of the Janus funds a few years later.)
Re: If index funds didn't exist, what would you do?
My 401(k) only offers one index fund, S&P500. To achieve my desired asset allocation, I have to hold a couple of their non-index funds. I use the closest approximation I can find: among the funds with coverage of the desired asset classes, choose the ones with the lowest expense ratios. As a result, I hold some shares of Pimco Total Return as a proxy for the total bond market, and some shares of Fidelity International Discovery as a proxy for a developed markets index. Not optimal but it'll suffice until I change jobs and can roll the 401(k) into an IRA.
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Re: If index funds didn't exist, what would you do?
That's a good point, Bungo. I'd like to suggest one's job, over the long run and in a total-return sense, is more important than one's 401(k) options. If you can find a better, by all means take it; but I wouldn't let the 401(k) tail, as we often say here about taxes, wag the employment dog.Bungo wrote:My 401(k) only offers one index fund, S&P500. To achieve my desired asset allocation, I have to hold a couple of their non-index funds. I use the closest approximation I can find: among the funds with coverage of the desired asset classes, choose the ones with the lowest expense ratios. As a result, I hold some shares of Pimco Total Return as a proxy for the total bond market, and some shares of Fidelity International Discovery as a proxy for a developed markets index. Not optimal but it'll suffice until I change jobs and can roll the 401(k) into an IRA.
PJW
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Re: If index funds didn't exist, what would you do?
Personally, I don' think Mr. Bogle's real legacy for investors was creating index funds. That would have happened regardless. Someone would have come around and said "Dow Jones is a pretty cool index around since 1899 we should come up with a way to invest in it". BTW Mr. Bogle did not come up with the first index fund anyways that goes to Rex Sinquefield of future DFA fame.
What Mr. Bogle did was MUCH bigger then just inventing an index fund. He changed the ENTIRE culture of the industry. He took an industry that was used/ accepted they could take advantage of the retail investor and FORCED them to change. Low cost investing was, is, and will always be secondary to Mr. Bogle's enduring legacy. Who would have EVERY guessed Fidelity would have Spartan funds if it wasn't for Mr. Bogle.
Good luck.
What Mr. Bogle did was MUCH bigger then just inventing an index fund. He changed the ENTIRE culture of the industry. He took an industry that was used/ accepted they could take advantage of the retail investor and FORCED them to change. Low cost investing was, is, and will always be secondary to Mr. Bogle's enduring legacy. Who would have EVERY guessed Fidelity would have Spartan funds if it wasn't for Mr. Bogle.
Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” |
-Jack Bogle
Re: If index funds didn't exist, what would you do?
If women didn't exist I would have not been divorced twice and probably would live several years longer.VictoriaF wrote:If women did not exist ... Oops, a wrong forum.
Victoria
Re: If index funds didn't exist, what would you do?
Did you index your women, or they were active?Calm Man wrote:If women didn't exist I would have not been divorced twice and probably would live several years longer.VictoriaF wrote:If women did not exist ... Oops, a wrong forum.
Victoria
Victoria
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- cheese_breath
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Re: If index funds didn't exist, what would you do?
I would bet they had high expense ratios.VictoriaF wrote:Did you index your women, or they were active?Calm Man wrote:If women didn't exist I would have not been divorced twice and probably would live several years longer.VictoriaF wrote:If women did not exist ... Oops, a wrong forum.
Victoria
Victoria
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Re: If index funds didn't exist, what would you do?
Just buy the components of the Dow Jones.
Though some combo of Wellington and Wellesley would work too.
Though some combo of Wellington and Wellesley would work too.
Re: If index funds didn't exist, what would you do?
StormShadow wrote:Just buy the components of the Dow Jones.
Though some combo of Wellington and Wellesley would work too.
+1
Re: If index funds didn't exist, what would you do?
There used to be a lot of thread titles along the lines of "Build my own index?"
I'd be tempted to buy 100 stocks with different characteristics and to adjust as litle as possible over the years. However, I think Bertilak's solution is best: Wellington and/or Wellesley.
I'd be tempted to buy 100 stocks with different characteristics and to adjust as litle as possible over the years. However, I think Bertilak's solution is best: Wellington and/or Wellesley.
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Re: If index funds didn't exist, what would you do?
What if discount brokerages didn't exist and trades cost about $100 each?linenfort wrote:....There used to be a lot of thread titles along the lines of "Build my own index?"
I'd be tempted to buy 100 stocks with different characteristics and to adjust as litle as possible over the years....
If index funds did not exist, it is unlikely that we would be drawn so closely to Vanguard and be so familiar with their list of mutual funds. As others have noted, if it weren't for index funds, the range of choice for good, conservatively managed, index-y, invest-don't-speculate, relatively-low-cost funds is much wider than just Vanguard.However, I think Bertilak's solution is best: Wellington and/or Wellesley.
"If all the world were paper,
And all the sea were ink,
If all the trees were bread and cheese--
What would we do for drink?"--"Mother Goose"
Last edited by nisiprius on Mon Nov 25, 2013 6:55 am, edited 1 time in total.
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Re: If index funds didn't exist, what would you do?
Honestly? DRiPs and a spreadsheet stock screen, using some simple rules. That's how I started out investing, and if I was willing to dedicate the required time and effort, I think it would still be a pretty good method, IF a person is not too speculative (I feel I'm not).
Re: If index funds didn't exist, what would you do?
#1 was indexed.VictoriaF wrote:Did you index your women, or they were active?Calm Man wrote:If women didn't exist I would have not been divorced twice and probably would live several years longer.VictoriaF wrote:If women did not exist ... Oops, a wrong forum.
Victoria
Victoria
#2 was active.
Per cheesebreath's question:
Both had high expense ratios. But #1 at least provided matching contributions while #2 had extra taxes.
Last edited by Calm Man on Mon Nov 25, 2013 7:26 am, edited 1 time in total.
Re: If index funds didn't exist, what would you do?
#3 should be sliced and diced.Calm Man wrote:#1 was indexed.VictoriaF wrote:Did you index your women, or they were active?Calm Man wrote:If women didn't exist I would have not been divorced twice and probably would live several years longer.VictoriaF wrote:If women did not exist ... Oops, a wrong forum.
Victoria
Victoria
#2 was active.
Victoria
Inventor of the Bogleheads Secret Handshake |
Winner of the 2015 Boglehead Contest. |
Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
Re: If index funds didn't exist, what would you do?
sounds like a good time for "rebalancing"!! lol
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Re: If index funds didn't exist, what would you do?
But instead he bought high and sold low.bondsr4me wrote:sounds like a good time for "rebalancing"!! lol
The surest way to know the future is when it becomes the past.
Re: If index funds didn't exist, what would you do?
Hmm, you're making it tougher. I'm used to free and then $2 trades at Vanguard.nisiprius wrote:What if discount brokerages didn't exist and trades cost about $100 each?linenfort wrote:....There used to be a lot of thread titles along the lines of "Build my own index?"
I'd be tempted to buy 100 stocks with different characteristics and to adjust as litle as possible over the years....
I would have bought equal parts Berkshire, Philip Morris and Microsoft, just after it becomes a publicly traded company.
However, I think Bertilak's solution is best: Wellington and/or Wellesley.
I suppose I'd be even more attracted to the Permanent Portfolo, then, which originally recommended some volatile growth stock mutual funds. And if even those crummy mutual funds didn't exist? Individual stocks, I guess, and the trading fees that go with them.nisiprius wrote:If index funds did not exist, it is unlikely that we would be drawn so closely to Vanguard and be so familiar with their list of mutual funds. As others have noted, if it weren't for index funds, the range of choice for good, conservatively managed, index-y, invest-don't-speculate, relatively-low-cost funds is much wider than just Vanguard.
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Re: If index funds didn't exist, what would you do?
The world would be less interesting, but would carry on. Men can reproduce by budding.VictoriaF wrote:If women did not exist ... Oops, a wrong forum.
Victoria
Haven't you ever encountered one man pointing out another, saying "this is my bud!"?
PJW
Re: If index funds didn't exist, what would you do?
Some are nipped in the bud.Phineas J. Whoopee wrote:The world would be less interesting, but would carry on. Men can reproduce by budding.VictoriaF wrote:If women did not exist ... Oops, a wrong forum.
Victoria
Haven't you ever encountered one man pointing out another, saying "this is my bud!"?
PJW
Victoria
Last edited by VictoriaF on Mon Nov 25, 2013 10:01 am, edited 1 time in total.
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