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Great Reading. Not much specificlly on bonds. Deals with: (1) Money market fund reform, (2) Retirement funding mess, (3) Expected returns going forward, (4) Spitzer and previous fund scandals, (5) Concentration in the fund industry, (6) and, as usual, fund expenses.
I disagree a bit on point #3. I don't view 8% annual return for a large well-managed pension fund as an unreasonable expectation over multi-decade periods going forward. He seems to infer that 5-7% is more likely,
My favorite exchange from the interview:
Phillips: " ... When I look at some of the firms out there, I see more of your DNA in a place like T. Rowe Price or American Funds than I do in some of the upstart, very specialized or leveraged index funds. What would your counsel be to someone: Would you rather have them buy a lower-cost actively managed fund than a high-cost index fund? - Bogle: I guess the answer to that, since I believe that cost is the single most important factor, is absolutely yes, provided the [active fund] had reasonable diversification."
Comments
I disagree a bit on point #3. I don't view 8% annual return for a large well-managed pension fund as an unreasonable expectation over multi-decade periods going forward. He seems to infer that 5-7% is more likely,
My favorite exchange from the interview:
Phillips: " ... When I look at some of the firms out there, I see more of your DNA in a place like T. Rowe Price or American Funds than I do in some of the upstart, very specialized or leveraged index funds. What would your counsel be to someone: Would you rather have them buy a lower-cost actively managed fund than a high-cost index fund?
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Bogle: I guess the answer to that, since I believe that cost is the single most important factor, is absolutely yes, provided the [active fund] had reasonable diversification."