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tony

Vanguard's Superiority Is A Myth

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This type of attack doesn't surprise me. Please share your comments. I see some serious flaws to his argument.

 

 

 

https://www.forbes.com/sites/michaelfoster/2017/03/21/14-funds-that-crush-vanguard-and-yield-up-to-11-9/#1430a69b282a

This says it all from the article:

What about longer timeframes?

Here’s the rub: many CEFs are too new for us to make the comparison.

To do this, I’ve chosen CEFs that are as close to the Vanguard funds as I could. However, because CEFs tend to take advantage of unconventional and less understood asset classes, none of these are 100% comparable to the Vanguard mutual funds.

Over time, reversion to the mean has a high probability of happening to 1 year CEF returns the author cherry picked for the article. It's way too easy to find things in retrospect to compare and say "See, look how this crushed the Vanguard Index Fund(s)", but there are many options in the investing world for one to meet their goals. Some more complex, some even more simple (a single company's stock - Apple, Berkshire, Amazon, Dominos, Facebook, Google, etc...), and on and on. Whether you use the 100 stock QQQ (which has a nice one year 23.37% gain with an ER of .2), or you pick something like the author did - you can always find various time frames of outperformance from investment instruments that are not 100% comparable to the Vanguard mutual funds. . Yet, the Vanguard Indexing is not trying to outperform the market. They are trying to match the benchmark index they represent.

So the attack is a non-starter.

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There are funds that outperform Vanguard. There are also individual stocks who outperform the market. But, how would you know this in advance? Doing a historical analysis and figuring this out is not a problem. How could someone 20 years ago guess that Amazon was going to become what it has become? There's no way to know in advance which funds or stocks will have above-average returns.

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There are funds that outperform Vanguard. There are also individual stocks who outperform the market. But, how would you know this in advance? Doing a historical analysis and figuring this out is not a problem. How could someone 20 years ago guess that Amazon was going to become what it has become? There's no way to know in advance which funds or stocks will have above-average returns.

 

I agree 100%!

Welcome to the forum profinGA.

 

Steve

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