Famous John C. Bogle Quotes

Fund investors are confident that they can easily select superior fund managers. They are wrong.


It’s 1450 out of 1500 ETF funds that I just wouldn’t touch because they’re not diversified enough. Or they have some huge speculative twist to them that if you can guess the markets right you will do very well for a day or two but who can do that? Nobody.


The grim irony of investing, then, is that we investors as a group not only don’t get what we pay for, we get precisely what we don’t pay for. So if we pay for nothing, we get everything.


Thomas Aquinas defined the human soul as the core of our being, and the power that brings our characteristics into unity so the soul of capitalism – in its own temporal world as contrasted to the spiritual world of human beings – is what defines the core of the system and the factors that unify to produce the wonderful world that we are blessed to live in.


Our capitalistic scheme in the latter years of the 20th century seems to have lost its way. We’ve had a “pathological change” from traditional owners capitalism where most of the rewards have gone to those who make the investments and assume the risks to a new and deeply flawed system of managers capitalism where the managers of our corporations our investment system, and our mutual funds are simply take too large a share of the returns generated by our corporations and mutual funds leaving the last line investors – pension beneficiaries and mutual fund owners at the bottom of the food chain.


The general systems of money management today require people to pretend to do something they can’t do and like something they don’t. It’s a funny business because on a net basis, the whole investment management business together gives no value added to all buyers combined. That’s the way it has to work. Mutual funds charge two percent per year and then brokers switch people between funds, costing another three to four percentage points. The poor guy in the general public is getting a terrible product from the professionals.


We need a federal government commission to study the way our financial services system is working – I believe it is working badly – and we also need more educated investors. There are good long term low-priced mutual funds – my favorite is a total stock market index fund – and bad short term highly priced mutual funds. If investors would get themselves educated, and invest in the former – taking their money out of the latter – we would see some automatic improvements in the system, and see them fairly quickly.


I believe that the mutual fund industry’s biggest shortcoming is too much focus on the momentary price of a stock – an illusion – and too little focus on the intrinsic value of the corporation – the ultimate reality. I’m comforted by the fact that Warren Buffett feels the same way.


I believe Washington should be a more active participant focusing on the issue of why corporate shareholders and mutual fund shareholders are not given fair treatment by corporate management and mutual fund management. We need to develop a national standard of fiduciary duty to ensure that these agents, if you will, are adequately representing the principles – pension beneficiaries and mutual fund shareholders – whom they are duty bound to serve.


Surprise! The returns reported by mutual funds aren’t actually earned by mutual fund investors.


The general systems of money management today require people to pretend to do something they can’t do and like something they don’t. It’s a funny business because on a net basis, the whole investment management business together gives no value added to all buyers combined. That’s the way it has to work. Mutual funds charge two percent per year and then brokers switch people between funds, costing another three to four percentage points. The poor guy in the general public is getting a terrible product from the professionals.


The idea that a bell rings to signal when investors should get into or out of the stock market is simply not credible. After nearly fifty years in this business, I do not know of anybody who has done it successfully and consistently. I don’t even know anybody who knows anybody who has done it successfully and consistently. Yet market timing appears to be increasingly embraced by mutual fund investors and the professional managers of fund portfolios alike.


The fund scandals shined the spotlight on the fact that mutual fund managers were putting their interests ahead of the fund shareholders who trusted them, which had much more substantial consequences in the form of excessive fees and the promotion – as the market moved into the stratosphere – of technology funds and new economy funds which were soon to collapse.


Our capitalistic scheme in the latter years of the 20th century seems to have lost its way. We’ve had a “pathological change” from traditional owners capitalism where most of the rewards have gone to those who make the investments and assume the risks to a new and deeply flawed system of managers capitalism where the managers of our corporations our investment system, and our mutual funds are simply take too large a share of the returns generated by our corporations and mutual funds leaving the last line investors – pension beneficiaries and mutual fund owners at the bottom of the food chain.


Yes, the investor is often his own worst enemy. Yes, the marketing colossus known as the mutual fund industry provides the weaponry which enables investors’ to indulge their suicidal instincts. No, the fund industry was hardly an innocent bystander in the market boom and the subsequent carnage. “We have met the enemy and he is us” . . . all of us.


Without getting into brothels, there are ethical capitalists the problem is that there aren’t enough of them. It is not “just a few bad apples” that have been evident in our corporations, our investment bankers and our mutual funds, but so many that one has to concede that the barrel itself needs some work.