John Bogle: Investors Pay Nothing
on Wednesday, May 24, 2017John Bogle Money Quote saying he defines ironic as getting all when paying none in the stock market. John Bogle said:
“The grim irony of investing, then, is that we investors as a group not only don’t get what we pay for, we get precisely what we don’t pay for. So if we pay for nothing, we get everything” — John Bogle
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In this quote, John Bogle is criticizing high fees and expenses in the mutual fund industry. By stating that collectively “we investors as a group not only don’t get what we pay for, we get precisely what we don’t pay for”, Bogle implies that high costs do not translate to better returns.
He suggests that if investors paid little to no fees (“if we pay for nothing”), they would achieve comparable or better returns since less money would be siphoned off to fees before returns are realized.
The interpretation is that Bogle views high fees as providing no real value to investors’ bottom lines, since performance is more dependent on market forces than on what fund managers are paid.
Bogle’s perspective conveys that high costs are essentially a drag on returns without buying investors any additional benefits. The overall message is that Bogle presents fees more as a subtraction from investors’ wealth accumulation rather than a justifiable expense for actively managed services.
Birthday May 8, 1929 – Death: January 16, 2019