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Vanguard 50-year anniversary CEO letter
- martinky24 1y agoThis is basically just a marketing press release.
- kfarr 1y agoYes but same with every other company blog post posted here
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- shartshooter 1y agoMy grandparents were children of the depression and encouraged me to invest in the vanguard 500 for as long as I could remember. Once I joined the military and had a steady paycheck I started putting some money away each month. Fast forward twenty-something years and I’m so so so grateful to have had that influence which gives me optionally in my life. No doubt investing with vanguard had a huge influence on their lives and I can’t imagine how many millions have been impacted. Dollar cost averaging ftw!
- jjice 1y agoAs children of the depression, where did your grandparents get the knowledge to invest in the market? From what I've seen, lots of people weren't keen on the market after growing up through the depression. Good on your grandparents.
- UncleOxidant 1y agoAgreed, that generation generally viewed the stock market as gambling and thus didn't tend to invest. I'm not sure I can blame them for coming to that conclusion after living through the Roaring 20s bubble and the ensuing Depression.
- tonyhart7 1y agowell it is a "gambling" tho, they are right but you cant avoid that like you still need to invest some of money into that
- chii 1y ago> that generation generally viewed the stock market as gambling and thus didn't tend to invest which, i reckon, might've been what made returns high as that cohort didn't invest as much while prices were down, and thus made more returns as prices grew in the future. The recent growth in people (esp. young people) investing (from it being easier than ever, to availability of information about investing) would make prices grow higher faster. This, i predict, means future returns are actually going to be lower for this generation.
- bad_haircut72 1y agoSince everyone "knows" index funds are the way to go, thats what everyone does, which IMHO is one of the reasons why stocks are so overvalued
- UncleOxidant 1y agoAnd companies getting onto an index seems potentially fraught with corruption when so much money is at stake. Is there a publicized algorithm that determines which companies get into an index or are palms greased? That said, I mostly invest in indexes even though I have concerns. I've just done much better over the years with index investing than investing in single stocks. Diversification is maximized in index investing.
- UncleOxidant 1y agoMy grandparents were children of the Depression and given their experience living through that they always considered the stock market to be gambling and thus never invested in the stock market. My parents absorbed that ethos and also never invested until they had to when they got a 401K (but they were well into their 50s)... then they liquidated their holdings as quickly as they could like they thought stocks were dirty, or something.
- bluedino 1y agoEven right now a lot of people retire and then liquidate their 401k I just don't get it. My father and father-in-law both did it.
- Retric 1y agoI agree it’s a terrible strategy on average, but Money has diminishing marginal utility. Having 1/10th as much money is far worse than having 10x as much is better. As such once people can lock in a reasonable retirement they often get really conservative.
- no_wizard 1y agoThis is why you might say, transition out of stocks being the majority of you portfolio to bonds. To completely cash out - as in, not be invested at all - isn't wise.
- h2zizzle 1y agoThis is why high progressive tax rates, let alone high marginal tax rates, are justifiable. The less you earn, the lower a percentage of your earnings you can afford to lose before having to make drastic lifestyle changes. However, relatively low on the absolute income range for Western countries, you reach a point where you could lose 90% of your income, live in a high-cost-of-living area, and still experience negligible change in your circumstances. Tax rates should be based on analyzing where that point is.
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- kccqzy 1y agoMy parents did quite a bit of "investing" by stock picking when I was little. That didn't work well and I didn't invest anything at all for quite a bit of time. One day I by chance discovered the /r/personalfinance subreddit and the bogleheads forum and that's when I started investing. Dollar cost averaging ftw indeed.
- kccqzy 1y agoI had a brain fart while writing this comment. I meant to say "indexing ftw" (and also that appears to be the main innovation of Vanguard).
- wing-_-nuts 1y agoYep, you would be shocked at what a high savings rate and consistent investing can do for someone, even without ever earning a FAANG salary. Being financially comfortable takes so much stress out of life.
- ahaushsbsuav 1y ago[flagged]
- traceroute66 1y ago> I started putting some money away each month To be honest, the positive of your story is less Vanguard, more this. You probably benefited more from old-fashioned compounding than Vanguard itself. Too many people, sadly, don't put some money away each month. They spend, and then they spend some more on credit, spending beyond their means. Yes, of course, there will always be people who genuinely live paycheck to paycheck due to whatever reason. But for people with a stable, reasonably well-paid job, its almost criminal not to put some money away each month.
- loire280 1y agoLiving below your means and saving is absolutely important, but the Vanguard-style index fund is what made the compounding you mention available to the general public. Without that investment vehicle, cash saved would lose value relative to inflation or be subject to a lot more risk, making retiring at a reasonable age much harder.
- jjice 1y agoJack Bogle probably did more for the average American investor than anyone else in history (maybe barring economic policy or something). His book [0] on the history of Vanguard, it's founding, and their growth is just a fantastic read. They really did feel like this bastion of customer focused passive investing in the brokerage industry for a _long_ time. They eventually helped seriously popularize index funds to the point where every major firm offers a low cost index fund, because they have to to compete. They continued to lower their fees whenever they could to the point where VTSAX is .04% (with their ETFs being even lower). He even turned down an offer to create the first ETF (I forget the guy that brought the idea to him), but he explained the idea to Bogle and Bogle politely declined because he thought that having the ability for intraday trading went against the Vanguard model of set and forget passive investing. That guy eventually went to the firm that runs SPY, if I recall from the book. They eventually began offering ETFs, obviously, but Bogle was always more of a mutual fund guy from the way that book puts it. Bogle really seemed to be for the people. The man was wealthy, but not nearly as wealthy as he could be because they continued lowering fees. Their mutualized fund structure is also a massive part of that. After he left Vanguard, you saw more traditional brokerage offerings - more active funds and more pushes for offer advisors to you over the phone. If I recall, Bogle expressed some displeasure in that. You can tell I'm a Bogle fanboy, but I'll gladly wear that badge. [0] https://www.goodreads.com/book/show/42938221-stay-the-course https://www.goodreads.com/book/show/42938221-stay-the-course
- avree 1y agoThe guy's name being John, but his nickname being "Jack", always confuses me.
- bklyn11201 1y agoI would love to hear from a Vanguard employee on their tech challenges, e.g., why is the client web interface significantly worse than competitors? Or is it purposeful? E.g., slow down, trade less?!
- jjice 1y agoI actually like their revamp a lot (last few years?). They have a million subdomains they send you around which is weird, but I don't mind the current UI. Sometimes they still send you to an old page though, like for scheduled investments (if I recall). What are the parts that irk you, out of curiousity? I think Fidelity's Net Benefits (which I believe is distinct from the personal site) is pretty bad though.
- sea-gold 1y agoNot the OP, but besides the subdomains, it feels like each section/UI/subdomain was designed by a different team. The overall interface doesn't feel cohesive (to me).
- bradfa 1y agoI HATE the new web interface. It's significantly slower, shows less useful information, and has many more times where it just doesn't work as compared to the old web interface. If there was an option to go back to using the old web interface fully, I would sign up for that immediately. For an example of a thing I hate about the new web interface is trying to buy a stock. You end up in some different part of the website where after you place your order it shows you a differently formatted order status page than the normal order status page. There's an Exit button at the top. Pressing the Exit button will pop up asking if you want to leave because you'll lose all your unplaced orders, of which you have none because how you got to the Order Status page was by fully placing an order. It's confusing for no reason.
- SomethingNew71 1y agoVanguard is really good at listening to feedback and using that to inform fixes to the various web and mobile applications. So if you're using the UI and see a survey, you should absolutely submit this feedback. They listen to it, and effect that change quite quickly on modernized pages.
- bix6 1y agoDo we think index funds will continue to be this financial savior for regular people in the future? On the one hand total market index exposure is fantastic. On the other it’s accumulating more and more with a few firms giving them exceptional power. Does this unravel at some point? It’s hard to think the index itself could go bad but perhaps everything behind the scenes could fall apart?
- spencerflem 1y agoIt seems like it has to at some point. Things have been so unsustainable for so long
- eadmund 1y ago> On the other it’s accumulating more and more with a few firms giving them exceptional power. I think that the next step will be for individual investors to instruct that their shares be voted according to certain guides. And then the step after that will be for large index investors to be able to directly vote their shares.
- TechDebtDevin 1y agoThe system is designed to only let one or two dominoes fall at a time.
- pipes 1y agoWhat is the evidence that it has been designed this way?
- walthamstow 1y agoThe book 'Trillions' by FT journo Robin Wigglesworth is very good on this subject
- bix6 1y agoAnything stand out to you? I’ll add it to the list but in the meantime I found these points from Chat interesting. 3. Impact on Corporate Governance With substantial holdings across numerous companies, major index fund providers possess significant voting power in shareholder decisions. Wigglesworth discusses the implications of this influence, questioning whether these firms can effectively oversee corporate management without the traditional incentives that drive active investors. 4. Systemic Risks and Market Stability The author also examines the potential systemic risks posed by the dominance of index funds. He explores scenarios where market shocks could be exacerbated by the passive nature of index investing, potentially leading to increased volatility and reduced market resilience.
- RivieraKid 1y agoI recently learned that index-following ETFs have a mildly concerning problem that could be equivalent to an annual fee approaching 1%. It's caused by rebalancing that happens by, for example, stock buybacks or equity raises, which typically happen when the trade is beneficial for the active investor side of the trade. See latest video on Ben Felix's channel.
- sea-gold 1y agohttps://www.youtube.com/watch?v=mqIHa6URUPk https://www.youtube.com/watch?v=mqIHa6URUPk
- wing-_-nuts 1y agoYeah, I saw that video. IMHO it's much more of a problem with smaller indexes. If you buy total stock market (VTI) just how often is a company going to be moving in and out of that index? I noticed he didn't really have much in the way of suggestions for the individual beyond suggesting DFA funds. Given those aren't easily available without signing up for their advisor services, I am deeply skeptical that the savings would be enough to pay for their fees.
- lokar 1y agoAlso, Aiui, for a very large index like VTI and fund admins have some flexibility for inclusion and weighting. They look out for obvious problems and try to adjust a bit.
- RivieraKid 1y agoIt's not just company being added or removed from the index but also company selling new shares or buying existing shares.
- kblissett 1y agoDimensional U.S. Equity Market ETF (DFUS) is an ETF freely tradable by many brokerages.
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- d_burfoot 1y agoI love Vanguard, and I would like see more companies like them. They offer a great service to millions of people, manage vast amounts of money, but the top leaders are not multi-billionaires.
- nknealk 1y agoVanguard regularly pushes the envelope on cutting fees for investment products. In 2025 they reduced their fee structure by 350M (1) (1) https://corporate.vanguard.com/feecuts https://corporate.vanguard.com/feecuts
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- ijustlovemath 1y agoI wish vanguard would release a 0-fossil fuels fund. I'd buy it in a heartbeat
- jeffdn 1y agoVGT is 0% fossil fuels, ESGV is 0.54%.
- solatic 1y agoI find the number of people in this thread with views against index funds to be disturbing. When you invest in an American stock market index fund, you get a highly diversified financial instrument at a fee that is so low that it is nearly free. You're buying into the proceeds of the strongest cultural force that is stronger in America than anywhere else in the world: greed. The force underlying your investment is that every CEO of every public company in America is working to make you richer, because if they succeed at making you richer, they've made themselves much richer in the process. You are investing in the greed of thousands of public company CEOs. When their greed pays off, you get paid off. No American president, least of all Donald Trump, is going to stop the raw power of American greed, and that's not going to change without some kind of religious revolution of morals in a country that has become increasingly less religious over time.
- tekla 1y agoI've talked to bunch of people who seem to hate stocks in general. It really feels like a bunch of people think the stock market is completely fake, gambling, and anyone who invests is directly contributing to strengthening capitalism, which is bad The fact that like 60-70% of Americans have direct exposure to markets through IRAs and 401k's and benefits incredibly from it is an anathema.
- some_random 1y agoI think a huge part of the problem is people's conflation of individual stock investment (which is risky), option trading (which is often gambling in the worst meaning of the word), and investing in mutual/index funds.
- alecco 1y agoThe people who destroyed value investing brag about their bubbles.
- fancymcpoopoo 1y agoAre index funds the biggest amoral pyramid scheme in existence today? It’s incredible how the prevailing advice is to indiscriminately contribute to the largest profiteering organizations. Its like encouraging everyone to go to college. No way it'll go tits up when time to retire.
- georgeecollins 1y agoI think you are making the argument-- poorly formed, frankly-- that if indexed investments become a big enough share of stock investing it will drive up the price beyond the fundamental value of equities more so than just investing individual equities. The stock market response to "liberation day" implies that stocks don't all move together as you would expect if indexing was driving everything. Certain FANG stocks did very poorly, some mid cap or European stocks did great. The market is still trying to respond to the perceived actual value of companies, not just the expectation that more indexes will pile in and buy. If people over invest in anything, including equities, the return on those investments will decline and bubbles will form. That can happen with the purchase of selective equities or with indexes. What Vanguard has done has probably not changed the market as much as lowering the cost to participate in it.
- bearcobra 1y agoI'm deeply worried about the number of people I see online who don't understand what Vanguard (or Blackrock, State Street, etc.) do and develop conspiracy theories instead. I think it presents a real risk for ETFs going into the future.
- soupfordummies 1y agoOh thanks for the new rabbit hole. I took a peek inside and it seems to be: Since they have so many shares of so many companies, they are secretly the shadow owners/operators OF all those companies.
- akimbostrawman 1y agoESG scores and similar have a very real and visible impact. Maybe if you are that worried instead of calling them all conspiracies you could actually address them.
- nly 1y agoThey've completely lost my business here in the UK. They are no longer the cheapest UK ETF or fund provider in any category, and their Vanguard Investor platform isn't the cheapest either.