Index Fund Quotes & Sayings

The commission of the investment sins listed above is not limited to 'the little guy.' Huge institutional investors, viewed as a group, have long underperformed the unsophisticated index-fund investor who simply sits tight for decades. A major reason has been fees: Many institutions pay substantial sums to consultants who, in turn, recommend high-fee managers. And that is a fool's game. — Warren Buffett

When you look at the results on an after-fee, after-tax basis over reasonably long periods of time, there's almost no chance that you end up beating the index fund. — David F. Swensen

The key aspect of an index fund is that many of them, not all of them, but many of them are extremely cheap. — William J. Bernstein

Still, I figure we shouldn't' discourage fans of actively managed funds. With all their buying and selling, active investors ensure the market is reasonably efficient. That makes it possible for the rest of us to do the sensible thing, which is to index. Want to join me in this parasitic behavior? To build a well-diversified portfolio, you might stash 70 percent of your stock portfolio into a Wilshire 5000-index fund and the remaining 30 percent in an international-index fund. — Paul Samuelson

Experience conclusively shows that index-fund buyers are likely to obtain results exceeding those of the typical fund manager, whose large advisory fees and substantial portfolio turnover tend to reduce investment yields. Many people will find the guarantee of playing the stock-market game at par every round a very attractive one. The index fund is a sensible, serviceable method for obtaining the market's rate of return with absolutely no effort and minimal expense. — Burton Malkiel

Nothing highlights better the continuing gap between rhetoric and substance in British financial services than the failure of providers here to emulate Jack Bogle's index fund success in the United States. Every professional in the City knows that index funds should be core building blocks in any long-term investor's portfolio. Since 1976, the Vanguard index funds has produced a compound annual return of 12 percent, better than three-quarters of its peer group. — Jonathan Davis

it's worth repeating that for most investors, selecting individual stocks is unnecessary - if not inadvisable. The fact that most professionals do a poor job of stock picking does not mean that most amateurs can do better. The vast majority of people who try to pick stocks learn that they are not as good at it as they thought; the luckiest ones discover this early on, while the less fortunate take years to learn it. A small percentage of investors can excel at picking their own stocks. Everyone else would be better off getting help, ideally through an index fund. — Benjamin Graham

It's bad enough that you have to take market risk. Only a fool takes on the additional risk of doing yet more damage by failing to diversify properly with his or her nest egg. Avoid the problem-buy a well-run index fund and own the whole market. — William J. Bernstein

An index fund is a fund that simply invests in all of the stocks in a market. So, for example, an index fund might invest in every single stock or almost every single stock in the U.S. market, it might invest in every single stock abroad, or it might invest in all of the bonds that are out there. And you can make a perfectly fine investing portfolio that mixes equal parts of all three of those. — William J. Bernstein

Monday ushers in a particularly impressive clientele of red-eyed people properly pressed into dry-cleaned suits in neutral tones. They leave their equally well-buttoned children idling in SUVs while dashing to grab double-Americanos and foamy sweet lattes, before click-clacking hasty escapes in ass-sculpting heels and polished loafers with bowl-shaped haircuts that age every face to 40. My imagination speed evolves their unfortunate offspring from car seat-strapped oxygen-starved fast-blooming locusts, to the knuckle-drag harried downtown troglodytes they'll inevitably become. One by one I capture their flat-formed heads between index finger and thumb for a little crush-crush-crushing, ever aware that if I'm lucky one day their charitable contributions will fund my frown-faced found art project to baffle someone's hallway. — Amanda Sledz

Most of the mutual fund investments I have are index funds, approximately 75%. — Charles R. Schwab

The best way to own common stocks is through an index fund. — Warren Buffett

Our standard prescription for the know-nothing investor with a long-term time horizon is a no-load index fund. I think that works better than relying on your stock broker. The people who are telling you to do something else are all being paid by commissions or fees. The result is that while index fund investing is becoming more and more popular, by and large it's not the individual investors that are doing it. It's the institutions. — Charlie Munger

The S&P is up 343.8 percent for 10 years. That is a four-bagger. The general equity funds are up 283 percent. So it's getting worse, the deterioration by professionals is getting worse. The public would be better off in an index fund. — Peter Lynch

If you invested in a very low cost index fund - where you don't put the money in at one time, but average in over 10 years -you'll do better than 90% of people who start investing at the same time. — Warren Buffett

Stocks are the things to own over time. Productivity will increase and stocks will increase with it. There are only a few things you can do wrong. One is to buy or sell at the wrong time. Paying high fees is the other way to get killed. The best way to avoid both of these is to buy a low-cost index fund, and buy it over time. Be greedy when others are fearful, and fearful when others are greedy, but don't think you can outsmart the market. If a cross-section of American industry is going to do well over time, then why try to pick the little beauties and think you can do better? Very few people should be active investors. — Alice Schroeder

A low-cost index fund is the most sensible equity investment for the great majority of investors. My mentor, Ben Graham, took this position many years ago, and everything I have seen since convinces me of its truth. — Warren Buffett

Two-thirds of professionally managed funds are regularly outperformed by a broad capitalization-weighted index fund with equivalent risk, and those that do appear to produce excess returns in one period are not likely to do so in the next. The record of professionals does not suggest that sufficient predictability exists in the stock market to produce exploitable arbitrage opportunities. — Burton G. Malkiel

Invest in low-turnover, passively managed index funds ... and stay away from profit-driven investment management organizations ... The mutual fund industry is a colossal failure ... resulting from its systematic exploitation of individual investors ... as funds extract enormous sums from investors in exchange for providing a shocking disservice ... Excessive management fees take their toll, and manager profits dominate fiduciary responsibility. — David F. Swensen

The best way in my view is to just buy a low-cost index fund and keep buying it regularly over time, because you'll be buying into a wonderful industry, which in effect is all of American industry ... People ought to sit back and relax and keep accumulating over time. — Warren Buffett

If your 401(k) is lucky enough to have Vanguard funds, look for, respectively, the (U.S.) Total Stock Market Index Fund, Total International Stock Index Fund, and either the Short-Term Bond Index or Total Bond Market Index Fund. As already mentioned, the Fidelity Spartan series is also excellent: the Total Market Index, International Index, and U.S. Bond Index (or Short-Term Treasury Bond Index) funds. — Anonymous

After costs, only the top 3% of managers produce a return that indicates they have sufficient skill to just cover their costs, which means that going forward, and despite extraordinary past returns, even the top performers are expected to be only as good as a low-cost passive index fund. The other 97% can be expected to do worse. — Eugene Fama

After a lifetime of picking stocks, I have to admit that Bogle's arguments in favor of the index fund have me thinking of joining him rather than trying to beat him. Bogle's wisdom and common sense are indispensable ... for anyone trying to figure out how to invest in this crazy stock market. — Jim Cramer

Most investors would be better off in an index fund. — Peter Lynch

By periodically investing in an index fund, the know-nothing investors can actually outperform most investment professionals. — Warren Buffett

People who buy equity ETF shares in taxable accounts, such as a joint account or trust account, will find their tax bill may be slightly lower at the end of the year than if they had purchased the same amount in a comparable open-end index fund. — Richard Ferri

The simple index fund solution has been adopted as a cornerstone of investment strategy for many of the nation's pension plans operated by our giant corporations and state and local governments. Indexing is also the predominant strategy for the largest of them all, the retirement plan for federal government employees, the Federal Thrift Savings Plan (TSP). The plan has been a remarkable success, and now holds some $173 billion of assets for the benefit of our public servants and members of armed services. — David F. Swensen

Most investors, both institutional and individual, will find that the best way to own common stocks (shares') is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) of the great majority of investment professionals. — Warren Buffett

The goal of the nonprofessional should not be to pick winners - neither he nor his "helpers" can do that - but should rather be to own a cross section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal. - WARREN BUFFETT, 2013 letter to shareholders — Anthony Robbins

A minuscule 4 percent of funds produce market-beating after-tax results with a scant 0.6 percent (annual) margin of gain. The 96 percent of funds that fail to meet or beat the Vanguard 500 Index Fund lose by a wealth-destroying margin of 4.8 percent per annum. — David F. Swensen