If we’re going to pass a law against conflicts of interest, shouldn’t there be a law against lobbying the government when such a conflict exists? (Which is always, of course.) How can John Bogle not admit that he and his friends benefit from the Fiduciary Rule?
The irony, of course, is that indexation needs discovery agents, and this legislation will put more obstacles in their path. Without price discovery (e.g., interest rates set by the market) and discovery agents (active investors, short sellers, upstart entrepreneurs), there is no vibrant economy that generates the returns Mr. Bogle’s customers covet.
It can’t be a coincidence that the government only recently discovered the merits of high-liquidity low-fee investing after a tripling of the S&P 500 in 8 years and a 35 year bull market in bonds. Should we be thanking them for ringing the bell yet again?
~ Kevin Duffy, April 11, 2017