16 thoughts on “People Are Finally Getting the Message

  1. In the last three calendar years, investors sank $823 billion into Vanguard funds, the company says. The scale of that inflow becomes clear when it is compared with the rest of the mutual fund industry — more than 4,000 firms in total. All of them combined took in just a net $97 billion during that period, Morningstar data shows. Vanguard, in other words, scooped up about 8.5 times as much money as all of its competitors.

    The triumph of index fund investing means Vanguard’s traders funnel as much as $2 billion a day into stocks like Apple, Microsoft and Amazon, as well as thousands of smaller companies that the firm’s fleet of funds track. That is 20 times the amount that Vanguard was investing on a daily basis in 2009. It is manageable, in large part, because no stock-picking is involved: The money simply flows into index funds and E.T.F.s, and through February of this year, nine out of every 10 dollars invested in a United States mutual fund or E.T.F. was absorbed by Vanguard.

    “Flows of this magnitude into one company are unprecedented,” said Alina Lamy, an expert on fund flows at Morningstar. “Since the crisis, investors have been saying, ‘I may not be able to control the market, but I can control how much I pay in mutual fund expenses.’ And when they look for quality funds with low fees, the first answer is Vanguard.”

    My only regret is that it took me until 2006 to learn this lesson, thanks to a savvy employee.

  2. Buy a few diversified index funds or ETFs, add to them on a regular basis, and hold. It can be hard not to freak out when the market is down, but remember that the long-term trend is for markets to grow. Oh, and ignore any advice from Jim Cramer FFS.

  3. I focus on science to the detriment of planning for my retirement. Right now my plan is to live off of the sale of my bay area house and/or take two weeks off before I die.

    1. If you had done the honorable thing, and failed out of engineering, you could have been a journalist too, you traitor.

        1. Since my kid reads and posts here now, I'm questioning the judgement of getting into a pissing match with you as to whether I was (or am) a bigger fuck up than you.

  4. Back when I had a jerb, my employer (retirement fund operators, actually) had a mind-numbing number of options available to us. The only one that I could make any sense of was the Vanguard. I put most of my eggs in that, and some in a more conservative fund. The convergence of the 2007-2008 crash and my sudden departure from the workforce hit me like a Mack truck. Nearly 50% loss of capital, combined with no income to help offset the losses. I moved what was left to a money market fund, where I experienced what I thought was impossible, an actual negative interest rate. The only thing left was to pull it and drop it into real estate. That withdrawal cost me 25% up front (it being a tax-deferred account) and even more come tax time. All I can do now is enjoy life in a house I'll never pay off. Molotov!

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