"Do not invest with Vanguard if you are a market-timer." - Vanguard

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
User avatar
Rowan Oak
Posts: 298
Joined: Mon May 09, 2016 2:11 pm
Location: Yoknapatawpha

"Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by Rowan Oak » Wed Oct 10, 2018 7:14 pm

"Do not invest with Vanguard if you are a market-timer." - Vanguard
This is the best quote from Vanguard in years. Found it looking through a current prospectus. Don't know how long they've been including this.

The line has been drawn.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

mortfree
Posts: 1318
Joined: Mon Sep 12, 2016 7:06 pm

Re: "Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by mortfree » Wed Oct 10, 2018 7:17 pm

My ETF market limit order at Vanguard went through today at almost $9/share less than the 52-week high.

False advertising.

User avatar
Taylor Larimore
Advisory Board
Posts: 27602
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: "Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by Taylor Larimore » Wed Oct 10, 2018 7:28 pm

Rowan Oak wrote:
Wed Oct 10, 2018 7:14 pm
"Do not invest with Vanguard if you are a market-timer." - Vanguard
This is the best quote from Vanguard in years. Found it looking through a current prospectus. Don't know how long they've been including this.

The line has been drawn.
Rowan Oak:
"Do not invest with Vanguard if you are a market-timer."
I am happy to see that Vanguard is doing the right thing by discouraging market timing.

viewtopic.php?f=10&t=156499

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

xenial
Posts: 2628
Joined: Tue Feb 27, 2007 1:36 am
Location: USA

Re: "Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by xenial » Wed Oct 10, 2018 8:21 pm

Rowan Oak wrote:
Wed Oct 10, 2018 7:14 pm
"Do not invest with Vanguard if you are a market-timer." - Vanguard
This is the best quote from Vanguard in years. Found it looking through a current prospectus. Don't know how long they've been including this.

The line has been drawn.
That line was drawn long ago. From the Vanguard Wellington prospectus dated March 19, 1999 (link):
PLAIN TALK ABOUT COSTS AND MARKET-TIMING

Some investors try to profit from market-timing -- switching money into investments when they expect prices to rise, and taking money out when they expect the market to fall. As money is shifted in and out, a fund incurs expenses for buying and selling securities. These costs are borne by all fund shareholders, including the long-term investors who do not generate the costs. Therefore, the Fund discourages short-term trading by, among other things, limiting the number of exchanges it permits.

THE VANGUARD FUNDS DO NOT PERMIT MARKET-TIMING. DO NOT INVEST IN THIS FUND IF YOU ARE A MARKET-TIMER.

User avatar
Rowan Oak
Posts: 298
Joined: Mon May 09, 2016 2:11 pm
Location: Yoknapatawpha

Re: "Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by Rowan Oak » Wed Oct 10, 2018 8:28 pm

Very good. Guess I never noticed it before or it's not included in all prospectuses.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

columbia
Posts: 1097
Joined: Tue Aug 27, 2013 5:30 am

Re: "Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by columbia » Wed Oct 10, 2018 8:29 pm

I’d say Vanguard does, in fact, have a high tolerance for market timing....


Vanguard Group begins an investing experiment that pushes free ETF trading to its limit
https://www.google.com/amp/s/www.cnbc.c ... sting.html

smectym
Posts: 252
Joined: Thu May 26, 2011 5:07 pm

Re: "Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by smectym » Thu Oct 11, 2018 1:28 am

columbia wrote:
Wed Oct 10, 2018 8:29 pm
I’d say Vanguard does, in fact, have a high tolerance for market timing....


Vanguard Group begins an investing experiment that pushes free ETF trading to its limit
https://www.google.com/amp/s/www.cnbc.c ... sting.html
Agree, the statement is unenforceable fluff and those who are oohing and ahhing about it, despite their intelligence and long experience, seem to affect an implausible naïveté.

Smectym

smectym
Posts: 252
Joined: Thu May 26, 2011 5:07 pm

Re: "Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by smectym » Thu Oct 11, 2018 1:45 am

smectym wrote:
Thu Oct 11, 2018 1:28 am
columbia wrote:
Wed Oct 10, 2018 8:29 pm
I’d say Vanguard does, in fact, have a high tolerance for market timing....


Vanguard Group begins an investing experiment that pushes free ETF trading to its limit
https://www.google.com/amp/s/www.cnbc.c ... sting.html
Agree, the statement is unenforceable fluff and those who are oohing and ahhing about it, despite their intelligence and long experience, seem to affect an implausible naïveté.

Smectym
One might add that in past years it was perhaps superficially possible to adopt a persimmon-faced attitude of clucking, finger-wagging disapproval toward so-called “market timers” by arguing (with thin or nil evidence) that their activities might adversely affect other, presumably wide-eyed and innocent, deserving-of-and-much-in-need-of-protection investors in a given mutual fund. Now Vanguard offers a full suite of market-traded ETF’s, many of which mimic its mutual fund alter egos.

Please alert the board when the news hits that Vanguard has disabled the trading account of a Vanguard brokerage customer for violating the sacrosanct “no market timing” commandment through the customer’s ETF trading.

Smectym

User avatar
JoMoney
Posts: 6257
Joined: Tue Jul 23, 2013 5:31 am

Re: "Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by JoMoney » Thu Oct 11, 2018 4:07 am

Frequent traders in mutual funds should be discouraged, it increases costs for long-term holders.
Frequent traders in ETFs help the traditional fund owners manage capital gains, and only hurt themselves.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

dumbmoney
Posts: 2292
Joined: Sun Mar 16, 2008 8:58 pm

Re: "Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by dumbmoney » Thu Oct 11, 2018 5:13 am

smectym wrote:
Thu Oct 11, 2018 1:28 am
columbia wrote:
Wed Oct 10, 2018 8:29 pm
I’d say Vanguard does, in fact, have a high tolerance for market timing....


Vanguard Group begins an investing experiment that pushes free ETF trading to its limit
https://www.google.com/amp/s/www.cnbc.c ... sting.html
Agree, the statement is unenforceable fluff and those who are oohing and ahhing about it, despite their intelligence and long experience, seem to affect an implausible naïveté.
It's enforced.

https://www.bogleheads.org/wiki/Frequent_trading_policy
I am pleased to report that the invisible forces of destruction have been unmasked, marking a turning point chapter when the fraudulent and speculative winds are cast into the inferno of extinction.

RadAudit
Posts: 3084
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: "Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by RadAudit » Thu Oct 11, 2018 8:45 am

In order to discourage market timing, maybe they just have server issues. viewtopic.php?f=10&t=261006&newpost=415 ... ead#unread :wink:

Which sort of raised the question of how many people can squeeze through the same door at the same time if everyone wants to leave at the same time.
Last edited by RadAudit on Thu Oct 11, 2018 10:52 am, edited 1 time in total.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The calvary isn't coming, kids. You are on your own.

User avatar
Rowan Oak
Posts: 298
Joined: Mon May 09, 2016 2:11 pm
Location: Yoknapatawpha

Re: "Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by Rowan Oak » Thu Oct 11, 2018 9:09 am

smectym wrote:
Thu Oct 11, 2018 1:28 am
columbia wrote:
Wed Oct 10, 2018 8:29 pm
I’d say Vanguard does, in fact, have a high tolerance for market timing....


Vanguard Group begins an investing experiment that pushes free ETF trading to its limit
https://www.google.com/amp/s/www.cnbc.c ... sting.html
Agree, the statement is unenforceable fluff and those who are oohing and ahhing about it, despite their intelligence and long experience, seem to affect an implausible naïveté.

Smectym
Not sure I see your point.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

asset_chaos
Posts: 1402
Joined: Tue Feb 27, 2007 6:13 pm
Location: Melbourne

Re: "Do not invest with Vanguard if you are a market-timer." - Vanguard

Post by asset_chaos » Thu Oct 11, 2018 3:40 pm

That phrase has been in every Vanguard prospectus I've read, which is definitely not every Vanguard prospectus, for the past 30 years.
Regards, | | Guy

Post Reply