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
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