[Cry if I Wanna]

Bogle changed everything.

[RoosterRedux]

He probably hates ETF’s because they have cost Vanguard and the industry a fortune in management fees.

[golux]

Dear Jack,
Thank you for waxing about the ETFs,
Now would you please tell your self-important Vanguard people to fix your metals, mining, emerging markets and energy portfolios.

[proxy_user]

“Bogle also criticizes the turnover in ETFs, claiming some funds have turnover rates of 2,000% to 4,000%. What Bogle fails to mention here is that turnover in ETFs doesn’t affect the holdings the way it does with a traditional mutual fund. Because ETFs are tied to an index, the buying and selling each day still results in the same holdings for the investor. This isn’t the case with mutual funds, which are most often not tied to any specific index.”

You have to understand a the ways EFTs actually make money for the financial giants that run them. Ever wonder why they encourage investors to buy and sell the funds freely?

The core paradox of an EFT is that it trades freely, based on supply and demand in the market, but is tied to its NAV. How is this done? When the value of an EFT falls below its NAV, the sponsor buys shares of the EFT and sells the underlying stocks, making money. When the value of an EFT climbs above its NAV, the sponsor buys the underlying stocks and creates new shares of the EFT, making money.

So it is in the interest of the sponsor for there to be massive churn in each EFT. Wild buying and selling by investors is likely to create arbitrage opportunities for the sponsor. These profits all come at the expense of investors who think their cost is only a $7.99 trade.

[Arm_Bears]

I have been employing a trend-following strategy for nearly four decades that’s kept subscribers out of bad bear markets and in roaring bull markets.

So what's your track record, Doug? Have you consistently beaten the market averages, costs included? What are you telling investors these days?

Historically, Mr. Bogle's focus has been primarily on costs. Anything that's traded frequently incurs a transaction fee (e.g., broker commissions) at both ends and, if capital gains are involved, taxes. These charges can reduce overall return significantly.

I've done pretty OK with a buy-and-hold approach; but, to each their own.

[expat2]

ETF's probably are not a real good vehicle for long-term investing as there are fees to be paid for just owning them. For long-term investing in specific stocks, it is probably better to buy the stock and sit back and get the dividends. But if you want to avoid stock-picking, then ETFs are a good way to go.