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Yahoo
08-07-2025
- Business
- Yahoo
Investor Used To Believe They Could Beat The Market By Picking Stocks. Now They Ask 'Is Holding Individual Stocks Worth The Stress Anymore?'
An investor on Reddit's r/stocks recently asked a question that hit home for many people: 'Is holding individual stocks worth the stress anymore?' 'I used to think I could beat the market by picking my own stocks,' the person wrote. 'But between earnings roulette, random macro shocks, and hype cycles, I'm starting to feel like just holding VTI/VT is the move.' VTI refers to the Vanguard Total Stock Market Index Fund ETF (NYSE:VTI), and VT (NYSE:VT) refers to the Vanguard Total World Stock Index Fund ETF. These are total market index funds that aim to mirror the performance of the entire U.S. or global stock markets, offering broad diversification with minimal effort. Don't Miss: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." $100k+ in investable assets? – no cost, no obligation. Many Redditors agreed, saying they had already switched to passive index funds because picking individual stocks was just too stressful and time-consuming. One user replied, 'If it is stressful, don't. VTI is pretty stable by comparison.' Another added, 'I feel like I have a second job babysitting my portfolio. I wish there were another way. Maybe this is it.' The r/Bogleheads approach was heavily referenced throughout the thread. Named after Vanguard founder John Bogle, this investing philosophy emphasizes long-term, low-cost, passive investing—typically through broad-market index funds—and encourages avoiding market timing or frequent trading. 'Just become a Boglehead and call it good. No guesswork, just long-term gains,' one comment said. Several investors pointed out that most professional stock pickers don't outperform the market consistently, so regular investors have an even steeper hill to climb. Trending: The secret weapon in billionaire investor portfolios that you almost certainly don't own yet. Even with all the warnings, some people still think picking individual stocks is worth it if you're willing to put in the time and have the right mindset. 'I pick individual stocks for fun,' one person said. 'As long as you're not buying risky/sh*tty stocks, you'll make money.' Some shared massive gains from choosing the right names at the right time. One investor said their investments in Palantir Technologies (NYSE:PLTR) and Nvidia (NASDAQ:NVDA) had more than quadrupled in value over the past three years. Another claimed they're 'up 700%' on AST SpaceMobile (NASDAQ:ASTS) and have more than tripled their net worth in the last two years. But not everyone trusts that these results are repeatable. 'The best analysts can't do it consistently on a long timeframe,' one person wrote. 'But you're probably better than them because you made one good pick?'Many investors in the thread advocated for a middle-ground approach. One described their approach as 90% passive investing, 5% allocated to unconventional assets such as gold, GameStop (NYSE:GME), and bitcoin, and the remaining 5% in actively managed stocks. 'I find having a small basket of stocks allows me to learn quite a bit about the companies.' Another added, 'The passive allocation does the heavy lifting, and the other 10% scratches the itch to be active.' There's also a psychological angle. One investor admitted, 'If you're stressed holding stocks at all-time highs, I wouldn't be in the market.' Some described stock picking as a rewarding hobby. 'I like knowing and believing in the names I hold. Even in periods of underperformance, I don't sweat it.' Whether to invest passively or actively depends on each investor's goals, temperament and willingness to put in the time. There's no one-size-fits-all approach, but knowing your limits may be just as important as knowing the market. Read Next: Over the last five years, the price of gold has increased by approximately 83% — Investors like Bill O'Reilly and Rudy Giuliani are using this platform to Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Investor Used To Believe They Could Beat The Market By Picking Stocks. Now They Ask 'Is Holding Individual Stocks Worth The Stress Anymore?' originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Economist
03-07-2025
- Business
- Economist
Vanguard will soon crush fees for even more investors
The town of Malvern is a 45-minute drive north-west of Philadelphia. It has a population of 3,400 or so, and was the site of a minor drubbing for George Washington's continental army in 1777. It is, in many ways, a fairly unremarkable, affluent corner of the American north-east. But Malvern stands out in one way: it is home to $10trn in assets under management. In 1975 Jack Bogle set up Vanguard in the town, launching the first index-tracking funds for ordinary savers soon after, with a focus on driving down the cost of investing. It worked. Today Vanguard manages both the world's largest mutual fund and its largest exchange-traded fund (ETF). The firm hosts 28% of American mutual-fund and exchange-traded-fund assets, a share that has climbed by seven percentage points in a decade. In America, though not around the world, Vanguard boasts as many assets as BlackRock, Fidelity and State Street combined. Its devotion to low fees has given it a cult-like following. Some call themselves Bogleheads. On June 26th The Economist sat down for an interview with Salim Ramji, Vanguard's boss. Mr Ramji joined the firm a year ago from BlackRock, where he oversaw index investments, making him the first outsider to have led Vanguard. He aims to apply what he calls the 'industrial logic' of Vanguard—lower fees combined with better returns—more thoroughly in advice, bonds, wealth management and even private markets. At the same time, he must navigate growing political scrutiny. Vanguard is a strange financial firm. It is a kind of co-operative, owned by its funds, which are in turn owned by their investors. Rather than raising the value of the company, Vanguard focuses obsessively on driving down fees, forcing the rest of the industry to follow suit. This downward ratchet, the 'Vanguard effect', has saved investors trillions of dollars since the firm's inception. On February 3rd Vangaurd announced that it would trim its average fee from 0.07% to 0.06%. BlackRock's share price fell by 5% on the same day. Mr Ramji's focus on fixed-income markets is clear from Vanguard's new offerings. All of the six ETFs it has launched in America this year are bond funds. 'The fixed-income market is twice the size of the equity market. It is far more inefficient than the equity market…It is far less understood,' says Mr Ramji. Vanguard is renowned for passive, index-tracking investment, but he argues that some of its best opportunities are in actively managed options, where there is more of a chance to bring down unreasonable fees. Many of Vanguard's customers are heading into retirement, explaining its new focus on financial advice. In January the firm established a separate advice and wealth-management division, which now oversees a little under $1trn in assets. Vanguard is pitching its services at a less prosperous market than rivals. Mr Ramji notes that the median Vanguard client has assets with the firm of under $100,000. The goal, he says, is to 'democratise advice, just as we have democratised investing'. In April Vanguard announced a tie-up with Blackstone, a private-markets giant, and Wellington, an asset-management firm. A month later the trio announced an 'all-markets fund' blending public and private assets. 'Private markets, if they are well designed, if they are well managed by the right kind of firm or firms, if they are well priced, can be additive from a risk-return point of view, for certain clients' portfolios,' Mr Ramji argues. He recalls an old Bogle saying: rather than looking for a needle in a haystack, investors should simply buy the haystack. 'Today the haystack includes private as well as public markets.' To purist Bogleheads some of this is close to heresy. Fees of any kind eat into returns. Private assets with higher fees and management costs are another drag. The die-hards will stick to bread-and-butter options: broad investments in stocks and bonds, with the lowest possible fees. But the expansion into new markets matters for Vanguard. Athanasios Psarofagis of Bloomberg Intelligence, a research outfit, estimated that the firm, even before its recent cut in fees, accounted for just 9% of American ETF revenues—far behind BlackRock's 28%, even though the two manage a similar volume of assets. Unlike its profit-driven competitors, the firm has few high-fee options to fund investment. One area of expense is technology upgrades, which are another priority for Mr Ramji. Some are unsexy. Vanguard has spent lots on cloud computing. At the end of last year, it announced a new technology-development office in Hyderabad, India. The next step, Mr Ramji says, will be AI-based assistance for clients, which should start to arrive next year. Mr Ramji will have to oversee such changes while fighting off political attacks. The size of Vanguard means it has long faced criticism for its dominance of the market. More recently, it has been lumped in with other asset managers by Republican lawmakers, who believe the firms have pushed green dogma onto the American companies they own. The criticism is relatively flimsy: Vanguard left the Net Zero Asset Managers initiative in 2022, over two years before BlackRock and many of its rivals, who bailed out only after President Donald Trump was re-elected. All the same, Vanguard faces a court case in Texas, along with BlackRock and State Street, filed by the state's Republican attorney-general and supported by a dozen other states. It accuses the firms of colluding to reduce production by coal miners. If it is successful, more could follow. The company should be able to withstand even fierce shots across the bow. Employees are referred to as crew, owing to Bogle's obsession with the Royal Navy. The Malvern canteen is 'the galley'. Campus buildings—Defence, Goliath and Orion among them—are named after ships of the Napoleonic Wars. Vanguard itself is named after Horatio Nelson's flagship. Perhaps more importantly, the company shows no sign that it is faltering under bombardment. This year it has attracted 29% of American etf inflows, as well as 41% of those into stockmarket funds. Bogle's ambition for Vanguard was as unique as its corporate culture. In his view, if a day came when his firm's market share began to tread water, putting its fee-cutting model in jeopardy, it would be a mark of success, for it would be proof that rival firms had been pushed into following Vanguard's lead. Mr Ramji takes inspiration from his illustrious predecessor, but in this sense he departs from Bogle's example. Vanguard's current boss wants his firm to rule the waves for a long time to come. ■
Yahoo
29-03-2025
- Business
- Yahoo
Vanguard Said to Eye Blackstone, Carlyle Pact to Offer Private Assets
The Vanguard Group, known for its passive, low-cost mutual funds and ETFs, has reportedly held talks with two of the world's biggest private equity companies about offering private assets to investors. Vanguard, which manages $3.1 trillion in 88 U.S.-issued ETFs, in recent months has discussed private asset agreements with Blackstone Inc. (BX) and Carlyle Group Inc. (CG), Bloomberg reported, citing sources familiar with the talks. No deal to market private assets jointly with Carlyle or Blackstone has been finalized, Bloomberg reported, and none of the firms commented on the anonymously sourced story. Vanguard has long been known as the everyman's investing partner, with a large choice of passive, low-cost mutual and exchange-traded funds and thousands of followers called "Bogleheads" after the company's founder, Jack Bogle. While a tie-up with an elite, white-shoe financial firm may or may not challenge that reputation, the suggestion of such comes as a surprise to the firm's long-time watchers. 'It seems out of left field,' Senior ETF Analyst Sumit Roy said. Roy noted that while Vanguard doesn't permit trading of spot bitcoin ETFs because it feels they aren't appropriate for long-term portfolios, questions remain about whether private assets 'are appropriate for individual investors and, if they are, how those assets are offered to individuals.' The suitability of private assets in ETFs was raised earlier this year after State Street and Global Management launched the SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) which aims to invest in private credit among other instruments. A day after the fund launched, the Securities and Exchange Commission raised concerns over the fund's liquidity risk management program and the use of Apollo in its name. Vanguard, with $10.4 trillion in assets, currently offers private equity to clients through a pact with HarbourVest, Bloomberg said, adding that the partnership manages $2.4 billion as of the end of last year. 'It's like letting the low cost fox inside the high cost hen house,' Bloomberg ETF analyst Eric Balchunas tweeted, adding that 'ETFs could threaten revenue while exposing the mark to magic system.'Permalink | © Copyright 2025 All rights reserved Sign in to access your portfolio
