bogleheadism == Vanguard?

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bogleheadism == Vanguard?

Post by kolea »

Many posts on the forum seem to equate bogleheadism with Vanguard. This is understandable since I think many people land here as a result of company savings programs administered by Vanguard. You cannot control what people post so that is not really an issue but the wiki, which you do control, also has the same problem. Many people (me included) adopted the Jack Bogle philosophy because it makes sense. It is wonderful because it is not tied to a vendor, although I imagine there was a period of time where one could only get a cheap index fund from Vanguard. But that is not the case anymore and if the goal of this site is to help people adopt and understand the boglehead philosophy as opposed to becoming a Vanguard customer, then I encourage you to scrub references to Vanguard in anything that you control, like the wiki. Otherwise you run the danger of being perceived as a marketing tool to promote Vanguard, which I assume to not be the case. Please let me know if I am wrong in this regard.

Thanks,
2x4
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Re: bogleheadism == Vanguard?

Post by LAlearning »

I'm pretty sure there are references to other companies...

I would get over it. "Promoting" Vanguard would help millions of people out...not too shabby IMO.
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Re: bogleheadism == Vanguard?

Post by LadyGeek »

We follow the philosophy of Jack Bogle, it's in the tag line at the top of the forum header. Although Jack Bogle founded Vanguard, we do not follow the company. However, Vanguard has very low cost funds and there is a strong tie to Jack Bogle.

As for the wiki, the content is the result of the members' contributions and more strongly to the experience and resources of the wiki editors. If you want to change the content, then by all means request to be a wiki editor and do this yourself. You can become a wiki editor by following the instructions on the wiki home page (or PM me).

The wiki is certainly not all Vanguard. Take a look at the right-side menu of Charles Schwab, for example. There are 10 companies not named Vanguard (or Wellington) in that list.

Or, look at Other than Vanguard, Boglehead-style for 10 different ways to make a three-fund portfolio without Vanguard.

The above is for the US. Take a look at the choices in our sister Canadian website wiki: Simple index portfolios - finiki, the Canadian financial wiki

Vanguard is mentioned, but it's one of many ways to do "Boglehead-style" investing.
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Re: bogleheadism == Vanguard?

Post by Mel Lindauer »

While Fidelity does have some low-cost index funds (The Spartan series), it's simply a response to Vanguard being previously referred to as "the low-cost leader". IMO, if it wasn't for Vanguard, there would be no Spartan series. And the rest of Fidelity's lineup is mainly focused on higher-cost active funds which attempt to beat the market and we know that for the vast majority of investors, that's a losing proposition. Costs matter, and Vanguard's corporate setup benefits its investors, while other fund companies have a profit motive that benefits their owners

So we're not the least bit ashamed to let the world know that we're huge Vanguard fans and supporters.
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Re: bogleheadism == Vanguard?

Post by FrugalInvestor »

This forum is named for Jack Bogle his investment philosophies. Vanguard was founded by Jack to enable the real-world implementation of those philosophies and has been very successful at doing so. Vanguard continues to be a if not the leader in low-cost indexing. I think it would be silly to pretend that many Bogleheads don't have affinity for Vanguard. On the other hand, I see no attempt to 'scrub' positive discussion of other fund companies here which I think would be the real problem.
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Re: bogleheadism == Vanguard?

Post by mhalley »

The one thing about Fidelity is that they seem to "hide" their low cost funds. You can find them, but they generally are on the last page of any search that might result in them coming up. With vanguard, all of their funds are going to be low cost, so you don't have to hunt around to try to find the one with the lowest er.
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Re: bogleheadism == Vanguard?

Post by MathWizard »

I don't think Vanguard gets that much mention.

I don't read every post, but the overwhelming number of posts have little to do with Vanguard.
Heck, I'd say that Warren Buffet, Dave Ramsey and TIAA-CREF get more more mention in this forum
than Vanguard does, but maybe I just notice those references more.

Go to the wiki and search for Vanguard, Fidelity, Charles Schwab, TIAA-CREF, T Rowe Price
you'll see pages on all of these.

Maybe you notice the references to Vanguard more than others.

Is there a reason why it would bother you?
If any one investment company would be spotlighted, I'd pick Vanguard hands down, just
for VTSAX (which I love) and the pressure it has put on other companies to lower fees.
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Re: bogleheadism == Vanguard?

Post by matjen »

MathWizard wrote:I don't think Vanguard gets that much mention.

I don't read every post, but the overwhelming number of posts have little to do with Vanguard.
Heck, I'd say that Warren Buffet, Dave Ramsey and TIAA-CREF get more more mention in this forum
than Vanguard does, but maybe I just notice those references more.
WHAT?!? I would say that you most certainly must notice the mentions of Buffett or Ramsey more. A quick search in the top right corner shows 78,900 mentions of Vanguard on this forum. There a few thousand of each of the others. Not that I have a problem with Vanguard mentions.
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Re: bogleheadism == Vanguard?

Post by MathWizard »

matjen wrote:
MathWizard wrote:I don't think Vanguard gets that much mention.

I don't read every post, but the overwhelming number of posts have little to do with Vanguard.
Heck, I'd say that Warren Buffet, Dave Ramsey and TIAA-CREF get more more mention in this forum
than Vanguard does, but maybe I just notice those references more.
WHAT?!? I would say that you most certainly must notice the mentions of Buffett or Ramsey more. A quick search in the top right corner shows 78,900 mentions of Vanguard on this forum. There a few thousand of each of the others. Not that I have a problem with Vanguard mentions.
Good point, I must notice these mentions more.
Thanks for the correction, and actual data.
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Re: bogleheadism == Vanguard?

Post by bottlecap »

TwoByFour wrote:I encourage you to scrub references to Vanguard in anything that you control, like the wiki. Otherwise you run the danger of being perceived as a marketing tool to promote Vanguard, which I assume to not be the case. Please let me know if I am wrong in this regard.
What "danger"? Vanguard still has the best index fund selection and the lowest costs overall. If you call them cold and ask for investment advice, they are the only fund family that actually recommends that you include index funds as a significant portion of your portfolio.

So, you're wrong in suggesting that all fund companies are created equal, as other providers typically don't think of their index funds as anything other than loss leaders. Everyone here would acknowledge that you can put together sufficient index portfolios with other fund companies, but Vanguard is still the gold standard. I don't know why anyone associated with this site would have to pretend that was not the case in order to appear "neutral." If telling the truth loses the site "customers," then so be it...

Nonetheless, there are plenty of posts here that are critical of Vanguard. In fact, I expect that if Vanguard ever started to treat its index fund offerings as an afterthought like other providers, those on this forum would be the first to criticize and among the first to jump ship.

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Re: bogleheadism == Vanguard?

Post by Ybsybs »

bogleheadism == TSP :D

TSP has index funds with significantly lower expense ratios. Most are around 0.029%. But only certain people are able to use what is effectively a 401(k) program for active duty servicemembers and government civilians, so naturally TSP isn't talked up as often as public investment companies open to everyone.
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Re: bogleheadism == Vanguard?

Post by matjen »

bottlecap wrote: Everyone here would acknowledge that you can put together sufficient index portfolios with other fund companies, but Vanguard is still the gold standard. I don't know why anyone associated with this site would have to pretend that was not the case in order to appear "neutral." If telling the truth loses the site "customers," then so be it...
I absolutely disagree with the 100% certainty of this post. Me loves me some Vanguard and I would say it is "probably" the best overall fund family if low cost passive, vanilla index investing is your goal. But there are customer service trade offs that you make for that low cost, there are website trade offs that you make, and there are no brick and mortar location trade offs that you make. These can be important for some people. Moreover, firms like Schwab may even be a tad less expensive for a simple portfolio.

That is my "truth."
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Re: bogleheadism == Vanguard?

Post by core4portfolio »

bogleheadism == stay with the principles of investing philosophy https://www.bogleheads.org/wiki/Boglehe ... philosophy

Since most of the forum people follows this and can be easily achieved by vanguard, so it looks like
we are promoting the vanguard.
You can use any vendor as long as you stay with the principles - you are boglehead :)
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Re: bogleheadism == Vanguard?

Post by Spirit Rider »

For the longest time, Vanguard was virtually the only game in town for low cost index funds. Many in this forum came over from the Diehards forum on Morningstar. You have to understand the long and storied history. There definitely is a certain affinity and loyalty to Vanguard. This is legitimately based on the history and track record of John Bogle's baby.

The vast majority of the threads are true to Mr. Bogle's legacy and can be considered vendor neutral. Given Vanguard's beginning, they just have a far greater assortment of low cost index funds than any competitor. A new investor is usually best served by starting at Vanguard. There are far fewer expensive temptations to stray from the tenets of low cost passive investing. So I do not consider guidance in that direction biased. The truth is still the truth.

However, in some cases you might add investing to politics and religion that you should not discuss. For some people this can be emotional and visceral that for some Vanguard fans can border on zealotry. This is especially true when comparing Vanguard to a certain unnamed competitor. Logic, reason, and facts can succumb to beliefs (that may no longer be true).
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Re: bogleheadism == Vanguard?

Post by bengal22 »

Even though I hold both Fidelity and Vanguard index funds, I strongly believe that Vanguard best represents the boglehead philosophy. However, there are issues with customer service and their recent push of their investment advice service does cause some concern that they are moving more toward increasing their profits and less free service. But Vanguard is a great mutual fund company where with one-stop you can have a low cost, diverse portfolio.
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Re: bogleheadism == Vanguard?

Post by IPer »

Wrong! What are you talking about? Read the Wiki again!
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Re: bogleheadism == Vanguard?

Post by cfs »

TwoByFour wrote:Otherwise you run the danger of being perceived as a marketing tool to promote Vanguard, which I assume to not be the case.
Thanks to our shipmate TBF for this good conversation. About “that perception thing” sometime ago one of our most helpful posters (name withheld to protect the innocent) was asked "Do you work for Vanguard" (or words to that effect). This poster was (unfairly) perceived as someone pushing the Vanguard products here. I don’t see any issues with any member “recommending” Vanguard--at the end of the day everyone is responsible for his/her investment decisions.

Thanks again.
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Re: bogleheadism == Vanguard?

Post by nisiprius »

TwoByFour wrote:Many posts on the forum seem to equate bogleheadism with Vanguard. This is understandable since I think many people land here as a result of company savings programs administered by Vanguard. You cannot control what people post so that is not really an issue but the wiki, which you do control, also has the same problem. Many people (me included) adopted the Jack Bogle philosophy because it makes sense. It is wonderful because it is not tied to a vendor, although I imagine there was a period of time where one could only get a cheap index fund from Vanguard. But that is not the case anymore and if the goal of this site is to help people adopt and understand the boglehead philosophy as opposed to becoming a Vanguard customer, then I encourage you to scrub references to Vanguard in anything that you control, like the wiki. Otherwise you run the danger of being perceived as a marketing tool to promote Vanguard, which I assume to not be the case. Please let me know if I am wrong in this regard.

Thanks,
2x4
I think it would be reasonably to accurate to say that the majority of posters here are "Vanguard fans." That doesn't mean we're paid shills for Vanguard marketing or that this is an astroturfed website. Forum regulars are probably aware that the core infrastructure is basically a labor-of-love donation of time and equipment from the forum's operators, Alex Frakt and Larry Auton.

It's not surprising that a website devoted to "Investing advice inspired by Jack Bogle" would be Vanguard-centered or Vanguard-focussed. Obviously the existence of the Bogleheads forum benefits Vanguard, but I don't think it's reasonable to request that we "scrub references to Vanguard."

As for people perceiving this site to be "a marketing tool to promote Vanguard," I don't think anyone who's actually spent fifteen minutes here is likely to think that. But if that's how they perceive it, I say let 'em. There are a hundred indications to the contrary.
--The Wiki has articles on how to implement Boglehead-style investing using non-Vanguard products at firms like Schwab, Fidelity, etc.

--There is a good deal of love for Vanguard's big, core index funds like Vanguard Total Stock Market Index Fund, Vanguard Total Bond Market Index, and Vanguard Total International Stock Index Fund. That love does not automatically extend itself to all things Vanguard.

--If you look at the responses to questions like "should I move everything to Vanguard," there is always a broad spectrum of opinions.

--Even among its index funds, opinions are quite mixed on Vanguard Total International Bond Index Fund.

--There's a broad spectrum of opinions regarding the composition and glide slope of Vanguard's target-date funds.

--It's pretty conspicuous that this forum doesn't automatically get on board with every Vanguard marketing push.
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Re: bogleheadism == Vanguard?

Post by kolea »

LadyGeek wrote:
Vanguard is mentioned, but it's one of many ways to do "Boglehead-style" investing.
Maybe I am being a little too sensitive. I have no problem with Vanguard, I own Vanguard funds (and funds from others). I was thinking of teaching an investment class at a local community center on boglehead investing and was wondering what resources are available from the wiki to help with that. There are lots of references to Vanguard products on some of the pages I was considering, which made me a little uncomfortable. I would not want to appear to be promoting any one company. That is the reason for my post here.
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Re: bogleheadism == Vanguard?

Post by Christine_NM »

TwoByFour wrote: I would not want to appear to be promoting any one company.
Mr. Bogle does an excellent job of giving interviews about personal finance (particularly the Frontline interview on hidden costs -- "Retirement Gamble") without constantly referring to Vanguard. I think that's because he naturally has a lot of nonbranded content in his mind -- he is more interested in ideas than products.

Most of us are capable of nothing more than recommending a Vanguard portfolio. But that is all it takes to avoid most of the traps out there, so no problem to me. Perhaps you will have to be more of an original thinker.

Whatever you do, don't try to solve the problem by simply mentioning a lot of companies instead of one.

Edited to add: mentioning many companies simply sends students to their websites, where they will be re-taught personal finance by each company's sales team.
Last edited by Christine_NM on Fri Jul 31, 2015 10:27 am, edited 1 time in total.
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Re: bogleheadism == Vanguard?

Post by nisiprius »

I think it would be appropriate to immunize the audience by "warning" them that the Bogleheads website is "Vanguard oriented" or even "a Vanguard fan site." I don't think there's an investing website in the world that doesn't have some kind of agenda or other, so they might as well learn to watch for that. Yes, in my opinion there's a pro-Vanguard bias here--but there's enough dissenting opinion to prevent it from being poisonous.
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Re: bogleheadism == Vanguard?

Post by kolea »

nisiprius wrote:I think it would be appropriate to immunize the audience by "warning" them that the Bogleheads website is "Vanguard oriented" or even "a Vanguard fan site."
That is pretty much what I decided to do.
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Re: bogleheadism == Vanguard?

Post by FrugalInvestor »

Christine_NM wrote:Most of us are capable of nothing more than recommending a Vanguard portfolio. But that is all it takes to avoid most of the traps out there, so no problem to me.
This is an excellent point (boldface is mine). I once had a close friend who was seriously ill and being taken advantage of by his investment advisers (his tax and investment professionals were in cahoots). He called me because over the years I had mentioned my style of passive index investing and he asked me what I thought he should do. I didn't want to get into his personal finances (and I don't think that he would have wanted that either) so I gave him some very general suggestions and referred him to Vanguard because I could trust them to point him in the right direction. It all worked out well - he's now gone and his wife is financially secure.

Could I have trusted any other company to lead him at 80% or more down the Boglehead path? I don't think so and this is why I use and don't hesitate to recommend Vanguard. The fact is that all fund companies are not equal when it comes to Boglehead style investing especially when the investor is not as proficient in their knowledge of Boglehead principles as many of those on this site - and that's most people.

So after thinking about your question further I think maybe there is good reason to mention Vanguard along with a discussion about Boglehead investment principles, especially if those you are relating to are not completely versed in those principles and are interested in how to implement them. That may or may not apply to your potential college class but I think it does apply to this Forum.
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Re: bogleheadism == Vanguard?

Post by Alex Frakt »

Vanguard is the default fund company option for a reason. Not only were they the first and for a long time only fund company to offer index funds to retail investors, they are the only mutual fund company that is actually a mutual company. There is no owner seeking to maximize profits at the literal cost of fundholders. In practice this means they have the widest variety of index funds at the lowest or very close to the lowest price, but more importantly, you can trust that all of their funds will continue to be a good deal. You don't have to worry about loss leaders expiring or management changes leading to a large increase in expenses. This makes it the best option when giving out general advice.
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Re: bogleheadism == Vanguard?

Post by LadyGeek »

This thread is now in the Local Chapters and Bogleheads Community forum (Boglehead vs. Vanguard smack-down).

I moved it here as the Forum Issues and Administration forum is more for organization and issues with the site (software, etc.).
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Re: bogleheadism == Vanguard?

Post by etarini »

Alex Frakt wrote:Vanguard is the default fund company option for a reason. Not only were they the first and for a long time only fund company to offer index funds to retail investors, they are the only mutual fund company that is actually a mutual company. There is no owner seeking to maximize profits at the literal cost of fundholders. In practice this means they have the widest variety of index funds at the lowest or very close to the lowest price, but more importantly, you can trust that all of their funds will continue to be a good deal. You don't have to worry about loss leaders expiring or management changes leading to a large increase in expenses. This makes it the best option when giving out general advice.
I'd been scrolling down through this thread, waiting for someone to point out the Vanguard corporate structure, and how it differs from ALL others.

This is especially notable at a time when nearly all of the financial services industry is fighting hard against fiduciary responsibility requirements.

Thanks for bringing this up, Alex!

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Re: bogleheadism == Vanguard?

Post by dhodson »

It should be noted that other companies have reasonable costs for index funds. Vanguard is sort of default recommendation for a variety of reasons but its true other companies should/could be recommended. For me, one of the problems is that i dont look often at the cost structure of other index funds but i have at vanguard and i probably personally parrot the views of others at time.

personally i use schwab for my investing by the way.

I will also say that vanguard also sells "crap" one typically shouldnt purchase. It is also irrelevant that vanguard is a mutual company. Multiple mutual companies sell things you typically shouldnt purchase.
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Re: bogleheadism == Vanguard?

Post by bottlecap »

matjen wrote:That is my "truth."
I'm not sure what you absolutely disagree with. Vanguard is still the gold standard for low cost index investing. If you like something else, that's fine - that's why there are other fund companies. It doesn't change the truth.

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Re: bogleheadism == Vanguard?

Post by peppers »

Boglehead vs Vanguard-smackdown

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Re: bogleheadism == Vanguard?

Post by kyh7 »

I wouldn't say they are equivalent. There are lots of Vanguard funds that people could purchase that don't really follow the Boglehead method. Plus, someone could just try market timing with Vanguard funds and that wouldn't follow the Boglehead way.

Vanguard is just a company that provides a service. That service aligns with many Bogleheads' interests (low cost index investing).

Also, recently, I was suggesting the Target Retirement funds to a friend, but I didn't look at it. When I did, I was surprised to see that most of them were almost 90/10 until pretty late in life. This was something I didn't realize. For some reason, I thought it followed the age-in-bonds heuristic, but it didn't.
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Re: bogleheadism == Vanguard?

Post by fidobogo »

I do Bogleheads with a brokerage other than Vanguard, and am very happy with both.

I've come to suspect that most every resource out there advising on money has at least one angle that's not well aligned with the reader. Yes, I assume that Bogleheads is going to end up sending new customers disproportionately to Vanguard, just because Bogleheads and Vanguard go together so well (for obvious reasons). But I really haven't noticed anything improper going on with Bogleheads.

The biggest bias, I think you'll actually see in the forum comments, in a grassroots way -- not coming from the wiki or the forum administrators. Say, some newbie asks about funds to accomplish some goal, and the answers they get from various people tend to be in terms of Vanguard funds. That can happen naturally, just because of the network effect from people being at Vanguard, believing in it, and being familiar with the funds. And there's a related cause in that, although I'm personally more familiar with some comparable funds that have free trades at my brokerage, I'm hesitant to bust out answers using them, unless someone is asking about that particular brokerage in particular, because I'm aware that Vanguard funds are more likely relevant.
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Re: bogleheadism == Vanguard?

Post by JoMoney »

Historically this board is a successor to Morningstars "Vanguard Diehards" forum ... correct?

Also, given the low-cost mantra, increasing Vanguard's AUM ties to lowering expenses on the funds.
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Re: bogleheadism == Vanguard?

Post by Mel Lindauer »

JoMoney wrote:Historically this board is a successor to Morningstars "Vanguard Diehards" forum ... correct?

Also, given the low-cost mantra, increasing Vanguard's AUM ties to lowering expenses on the funds.
Yes, this forum's core of beginning members came from the old Morningstar Vanguard Diehards forum where the Bogleheads were "born".
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Re: bogleheadism == Vanguard?

Post by LadyGeek »

Here's the background info: The Bogleheads®

You can get to this article by clicking on the About Bogleheads® link at the bottom of every wiki page.
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Re: bogleheadism == Vanguard?

Post by abuss368 »

The Bogleheads forum is the best investing forum on the internet and is "investing advice inspired by Jack Bogle"!
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Re: bogleheadism == Vanguard?

Post by Dimitri »

Finance 301 at Babson College with Simeon Wooten (RIP) circa 1986. I distinctly remember him telling us that Vanguard had linoleum on the floor. That made quite an impression on me. Not that I was much of an investor until 2002 when I got married and my wife got me focused on something other than baccarat (no excuses or apologies - I had a lot of fun and wouldn't give up those years for a million dollars). But once I got serious I only considered Vanguard. Are there alternatives? Yes. Am I likely to consider them? Probably not.
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Re: bogleheadism == Vanguard?

Post by BTDT »

TwoByFour wrote: I encourage you to scrub references to Vanguard in anything that you control, like the wiki. Otherwise you run the danger of being perceived as a marketing tool to promote Vanguard"Thanks,
2x4
The Boglehead's forum is a non-profit group of unpaid volunteers. Perhaps you should consider joining the wiki editor's and work together to review and "scrub" those items you consider damaging to the BH forum?
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Geologist
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Re: bogleheadism == Vanguard?

Post by Geologist »

William Bernstein’s Four Pillars of Investing mentions Vanguard funds extensively, but that doesn’t make him a marketing tool of Vanguard anymore than this site. Costs matter and Vanguard has long been the leader in low-cost investing for the typical investor.

This goes beyond index funds to bond funds, such as corporates or municipals, where Vanguard’s costs are (as usual) very low, but the competitors who have matched the low expense ratios on major index funds have generally not done so on these bond funds.

Vanguard is not perfect, but it is perfectly reasonable that it is commonly mentioned on this site.
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Re: bogleheadism == Vanguard?

Post by LadyGeek »

BTDT wrote:
TwoByFour wrote: I encourage you to scrub references to Vanguard in anything that you control, like the wiki. Otherwise you run the danger of being perceived as a marketing tool to promote Vanguard"Thanks,
2x4
The Boglehead's forum is a non-profit group of unpaid volunteers. Perhaps you should consider joining the wiki editor's and work together to review and "scrub" those items you consider damaging to the BH forum?
The wiki follows the same guidelines as Wikipedia: Wikipedia:Five pillars (it's also the same software) In this case, it's applying a Neutral point of view
All encyclopedic content on Wikipedia must be written from a neutral point of view (NPOV), which means representing fairly, proportionately, and, as far as possible, without bias, all of the significant views that have been published by reliable sources on a topic.
Rather than scrub content, I would encourage enhancement of content. If other companies can provide "Boglehead-style" investing, then lets put it in the wiki.

Here's one: Blackrock iShares Take a look at the bottom of the article, which is the Template:Investment management companies.

The 2nd entry "Exchange-traded funds" has Blackrock iShares as the only entry. The best way to learn something is to try and teach it.

If anyone would like to add articles from other companies, become a wiki editor and do this yourself. You'll learn a lot in the process and help the members at the same time.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
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Re: bogleheadism == Vanguard?

Post by kenner »

TwoByFour wrote: Please let me know if I am wrong in this regard.

Thanks,
2x4
You are wrong.

Contributors to this forum advocate succesful investment plans for indiviuals who seek advice, not any specific company.

Many posts recommend Fidelity, T. Rowe Price, Schwab, etc.

Typically, we do not recommend investments that are so expensive that they primarily benefit only the seller of the investment.

It is our fervent hope that people will read and comprehend the collective wisdom that is so freely shared here.
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Re: bogleheadism == Vanguard?

Post by retiredjg »

TwoByFour wrote:Maybe I am being a little too sensitive. I have no problem with Vanguard, I own Vanguard funds (and funds from others). I was thinking of teaching an investment class at a local community center on boglehead investing and was wondering what resources are available from the wiki to help with that. There are lots of references to Vanguard products on some of the pages I was considering, which made me a little uncomfortable. I would not want to appear to be promoting any one company. That is the reason for my post here.
I struggle with this myself.

I don't think you are being too sensitive. But I do think in your efforts to be neutral and equal handed, you are seeing it wrong. In fact, I think you may be overlooking the obvious because you are trying so hard to be neutral.

I'm one of many Bogleheads who help the new folks on a regular basis. And that is the reason why I struggle with this. If a person understands the principles and is willing to use ETFs rather than mutual funds, that person can make a Boglehead type portfolio almost anywhere.

But many of the people coming here (and presumably many or most of your students) don't know what they are doing yet. Mutual funds are a bit of a mystery but ETFs are really a mystery. Vanguard is the one place they are most likely to be able to follow the principles without messing up or falling into some kind of bottomless pit.

So in my recommendations, the name Vanguard comes up a lot. It is not because I think Vanguard walks on water (although I do think they they walk closer to "on water" than the others). It's because the investors are less likely to make a mistake and they are less likely to get messed over (obvious euphemism) at Vanguard than any other brokerage. That's why I'm more comfortable recommending Vanguard than any other place.

It used to be that Vanguard was pretty much the only place we could suggest that people invest. Now that no-commission ETFs exist and now that the Spartan funds and the Fidelity Freedom Index Funds are available, at least there are other possibilities if an investor knows what s/he is doing.

But try to imagine suggesting to someone to form a basic 3 fund portfolio somewhere else. Oh my goodness, the possible pitfalls are numerous.

Or try to suggest a target fund that follows the Boglehead principles from a different fund company. There are a a few, but that it can be a challenge and requires more knowledge of asset classes and costs.

If you want to teach this class right, you will teach the principles and let the students figure it out for themselves - what they want to achieve is easiest at Vanguard but it can be accomplished using other or even many brokerage firms if they know what they are doing.
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Re: bogleheadism == Vanguard?

Post by kolea »

kenner wrote:
TwoByFour wrote: Please let me know if I am wrong in this regard.

Thanks,
2x4
You are wrong.

Contributors to this forum advocate succesful investment plans for indiviuals who seek advice, not any specific company.

Many posts recommend Fidelity, T. Rowe Price, Schwab, etc.
My question was not about forum posts it was only about the wiki.

@LadyGeek - I am intrigued with your comments on wiki editing. Not sure I ever will but your advice to "enhance" rather than "scrub" is spot on and I would take that approach.
Kolea (pron. ko-lay-uh). Golden plover.
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Re: bogleheadism == Vanguard?

Post by bottlecap »

TwoByFour wrote:I was thinking of teaching an investment class at a local community center on boglehead investing and was wondering what resources are available from the wiki to help with that. There are lots of references to Vanguard products on some of the pages I was considering, which made me a little uncomfortable. I would not want to appear to be promoting any one company. That is the reason for my post here.
Why not just tell the class about all of the major providers who offer index funds and tell the class about the pros and cons of each? That's not that difficult and should be a part of the class anyway.

JT
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Re: bogleheadism == Vanguard?

Post by SamB »

I followed the philosophy of Bogle before I knew who he was. Of course it was a lot harder, you might say an accounting nightmare, before the low cost index fund came along. And my philosophy is not at all tied to this forum. People, investment companies, and internet forums come and go. If this determines how you are investing then perhaps you do not know enough, or lack the strength of your convictions.

Vanguard happens to represent what I believe in in terms of investment philosophy. However, that could change.
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Re: bogleheadism == Vanguard?

Post by kenner »

TwoByFour,

Unless you tell us, we have no way of knowing your depth of kowledge of the history of the investment world prior to the monumental changes that John Bogle and Vanguard inspired. 40 years ago it was common that mutual fund companies charged an up-front "load" fee of 8.5% of your total investment plus more than 1% every year of your investment total for the priviledge of investing with them. The annual charge applied even if your investment lost money.

I cannot imagine teaching students to return to those days. Can you?
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Re: bogleheadism == Vanguard?

Post by nisiprius »

It's a commercial world, and if you don't ever mention any brand names at all you are betraying your audience by not giving any concrete suggestions.

You could be concealing a brand prejudice, for example by saying something like "I suggest a low-cost total world stock index fund," without mentioning that (AFAIK!) there's only one such product. (Only one mutual fund. There are two ETFs--only two--iShares ACWI being the other).

You are also setting people up if they try to approach a brokerage or advisor without anything concrete in mind. For example, if you just say a "low cost index fund" and don't give a few real-world examples with their actually real-world expense ratio numbers, they are vulnerable to an "advisor" saying:

"Low cost index fund? Sure thing, you bet, if you are really sure you want a (yecccch) index fund after I going to show you a few others. But, sure, for a low-cost index fund, this is the one I always recommend to my clients:"

Image

You would really like your audience to be going in at least having heard of V******d, F******y, and Sch**b's "low-cost index funds" and a few of the "brand name" ETFs... and their expense ratios.
Last edited by nisiprius on Sun Aug 02, 2015 1:13 pm, edited 2 times in total.
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Re: bogleheadism == Vanguard?

Post by iceport »

etarini wrote:
Alex Frakt wrote:Vanguard is the default fund company option for a reason. Not only were they the first and for a long time only fund company to offer index funds to retail investors, they are the only mutual fund company that is actually a mutual company. There is no owner seeking to maximize profits at the literal cost of fundholders. In practice this means they have the widest variety of index funds at the lowest or very close to the lowest price, but more importantly, you can trust that all of their funds will continue to be a good deal. You don't have to worry about loss leaders expiring or management changes leading to a large increase in expenses. This makes it the best option when giving out general advice.
I'd been scrolling down through this thread, waiting for someone to point out the Vanguard corporate structure, and how it differs from ALL others.

This is especially notable at a time when nearly all of the financial services industry is fighting hard against fiduciary responsibility requirements.

Thanks for bringing this up, Alex!

Eric
Exactly. I was also surprised it took so long for someone to bring this up, and continue to be surprised that it hasn't been seized upon.

My understanding of Vanguard has evolved since opening an account over 10 years ago. I might well have moved on if I hadn't come to appreciate their corporate structure and culture so much.

Vanguard seems far more likely than any other big investment firm to:

► focus on minimizing fund management expenses, rather than convincing folks high fees are worth it
► faithfully and promptly reflect fund management costs in expense ratios
► manage index funds with particular skill at tracking the indexes while minimizing transaction costs and tax consequences
► encourage a long-term, buy-and-hold approach that simultaneously benefits investors and the funds they invest in

That last point deserves particular attention.

With virtually no other big box investment firm out there with Vanguard's focus, there seems to be a strong objective rationale for favoring Vanguard.
"Discipline matters more than allocation.” |—| "In finance, if you’re certain of anything, you’re out of your mind." ─William Bernstein
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Re: bogleheadism == Vanguard?

Post by kolea »

kenner wrote:TwoByFour,

Unless you tell us, we have no way of knowing your depth of kowledge of the history of the investment world prior to the monumental changes that John Bogle and Vanguard inspired. 40 years ago it was common that mutual fund companies charged an up-front "load" fee of 8.5% of your total investment plus more than 1% every year of your investment total for the priviledge of investing with them. The annual charge applied even if your investment lost money.

I cannot imagine teaching students to return to those days. Can you?
No, of course not. But I am not sure I would "teach" them anything about any vendors. The important elements to teach are all listed in the Boglehead philosophy with "low cost" being a very important item. I can give them an idea what "low cost" is (10 BP or less is all good, IMO) and other things to look for in a fund (ETF vs. mutual funds, inception date, what index it follows and the difference between some the indexes, total assets, etc.). I am sure I would encourage people to check out Vanguard, Fido, Schwab, iShares, and any others but absolutely, to do their own research.

As you can tell from my OP, I am very leery of coming across like an infomercial. I really want people to know there is a better way then expensive money managers or expensive funds, but my goal would be to give them the tools so they can make better informed decisions that will ultimately improve their investment outcome rather than steer them to any particular vendor. If I have done my job they will figure out on their own that Vanguard is a pretty good vendor.

As I mentioned above, I was hoping to point people right to the wiki pages on Boglehead pholosophy, but that raised my infomercial concerns.
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Re: bogleheadism == Vanguard?

Post by Taylor Larimore »

TwoByFour wrote: if the goal of this site is to help people adopt and understand the boglehead philosophy as opposed to becoming a Vanguard customer, then I encourage you to scrub references to Vanguard in anything that you control, like the wiki. Otherwise you run the danger of being perceived as a marketing tool to promote Vanguard, which I assume to not be the case. Please let me know if I am wrong in this regard.
TwoByFour:

If it is obvious that Vanguard is the best mutual fund company for meeting the needs of an investor, it would be a disservice "to scrub references to Vanguard."

On the other hand, if there is evidence that other mutual fund companies can fill the investor's needs as well or better, then I agree they should be mentioned or recommended.

In my opinion, the wiki does an excellent job balancing the two approaches.

Best wishes.
Taylor
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Re: bogleheadism == Vanguard?

Post by goingup »

retiredjg wrote: It used to be that Vanguard was pretty much the only place we could suggest that people invest. Now that no-commission ETFs exist and now that the Spartan funds and the Fidelity Freedom Index Funds are available, at least there are other possibilities if an investor knows what s/he is doing.

But try to imagine suggesting to someone to form a basic 3 fund portfolio somewhere else. Oh my goodness, the possible pitfalls are numerous.
That's the thing about Fidelity, which many people seem to think is a close second to Vanguard in terms of fund offerings. You really have to specify folks look at INDEX funds. If you just go to the Fidelity website and pull up mutual funds, the first page contains 43 equity funds with HUGE expense ratios. The bond fund offerings are also very limited.

I can remember (back on the Diehard forum) when ER reductions by Fidelity were met with suspicion. Some people thought it might be bait and switch and that the Johnson family might not be committed to permanently lowering fund ERs. There just isn't any doubt that Vanguard's entire business model has been built on a low cost mutual fund structure.
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