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My Concerns as Money Piles Up at Vanguard

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Let the good times roll? Great lyrics from the Cars but it’s a song I can’t get out of my head thinking about the money piling up by the truckload at Vanguard’s back door. We’re talking nearly $300 billion in the first nine months of this year alone. All of that money unloaded and stacked up with the rest of the $4.7 trillion at the firm. That’s a lot of confidence in one company. And maybe Vanguard deserves it thanks to the tireless work of founder Jack Bogle on the power of low cost index investing. But where is all that money going?

As I’ve stated in my piece last week on balanced funds, I believe high powered money, unfortunately, is crowding out the retirement investor like you. You are the investor I’m writing to, not the huge foundations, pensions, or trusts, that have their own armies of advisors who probably look at Vanguard as just a piece of their massive wealth preserving puzzle.

What happens when this crowd, the big money, decides to pack up and leave? The big fish can basically do what they want, but unfortunately their actions affect the smaller fish. That makes me uncomfortable. A better way might be to separate yourself from this crowd. I’d be happy to talk with you about how to do that. You can reach me at ejsmith@youngresearch.com.

 

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.