Index Funds Quotes & Sayings

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

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

Index funds are ... tax friendly, allowing investors to defer the realization of capital gains or avoid them completely if the shares are later bequeathed. To the extent that the long-run uptrend in stock prices continues, switching from security to security involves realizing capital gains that are subject to tax. Taxes are a crucially important financial consideration because the earlier realization of capital gains will substantially reduce net returns. — Burton Malkiel

I was involved with Wells Fargo Bank as a consultant in the late 1960s and early 1970s, when I suggested to them that they develop a product that has become known as index funds. — Myron Scholes

I am a huge, huge, huge fan of index funds. They are the investor's best friend and Wall Street's worst nightmare. — Jonathan Clements

Even fans of actively managed funds often concede that most other investors would be better off in index funds. But buoyed by abundant self-confidence, these folks aren't about to give up on actively managed funds themselves. A tad delusional? I think so. Picking the best-performing funds is 'like trying to predict the dice before you roll them down the craps table,' says an investment adviser in Boca Raton, FL. 'I can't do it. The public can't do it.' — Paul Samuelson

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

We can extrapolate from the study that for the long term individual investor who maintains a consistent asset allocation and leans toward index funds, asset allocation determines about 100% of performance. — Roger G. Ibbotson

Index funds do not trade from security to security and, thus, they tend to avoid capital gains taxes. — Burton Malkiel

Index funds eliminate the risks of individual stocks, market sectors, and manager selection. Only stock market risk remains. — John C. Bogle

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

Large-caps were safe in 1996, '97, '98. Everybody was buying index funds and Nifty Fifty funds. As long as money was pouring in, it was great. — Louis Navellier

Index funds have regularly produced rates of return exceeding those of active managers by close to 2 percentage points. Active management as a whole cannot achieve gross returns exceeding the market as a while and therefore they must, on average, underperform the indexes by the amount of these expense and transaction costs disadvantages. — Burton Malkiel

Building a portfolio around index funds isn't really settling for the average. It's just refusing to believe in magic. — Bethany McLean

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

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

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

After adjusting the comparison of index funds to actively managed funds for survivorship bias, taxes, and loads, the dominance of index funds reaches insurmountable proportions. Once — Charles D. Ellis

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