Investors Pour Into Vanguard, Eschewing Stock Pickers

[mahatmakanejeeves]

This was on the front page, below the fold, of today's The Wall Street Journal.

I'm delighted he's finally following my investing advice, but what took him so long?

Disclaimer: I have money in the Vanguard 500 Index Fund. I also have money in Vanguard Windsor, and I own shares of individual stocks. Sometimes I come out ahead picking my own stocks, and other times, it's painful to think about.

Investors Pour Into Vanguard, Eschewing Stock Pickers

By Kirsten Grind
Updated Aug. 21, 2014 11:31 a.m. ET

Investors are pouring money into Vanguard Group, the epitome of the hands-off approach to investing, flocking to funds that track market indexes and aren't run by stock pickers or star managers. ... The inflow has pushed the mutual-fund giant to almost $3 trillion in assets under management for the first time.
....

Vanguard got a huge boost this spring when Warren Buffett gave it a public stamp of approval in March. ... The billionaire wrote in his closely watched letter to shareholders of his company, Berkshire Hathaway Inc., that he believed most people would be well-served by following the investing instructions in his will. ... Mr. Buffett, 83 years old and with a net worth of $66 billion, wrote that he advised his trustee to "put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.)."
....

Philip Henry, 30, a securities lawyer in Mountain View, Calif., said that in recent months he has moved about $25,000 into Vanguard's index funds from his former 401(k) provider, the asset manager TIAA-CREF. Mr. Henry said he became convinced that index funds were far superior to actively managed funds after doing research and reading a book by Mr. Bogle. He said cost was a key factor. ... "I'm firmly convinced it's the better way to go," Mr. Henry said. "I don't believe fund managers can beat the market."

The average Vanguard U.S. equity index fund has an expense ratio of 0.1% versus 0.7% for competitors and 1.3% for an actively managed stock fund, according to Morningstar.....

—Anupreeta Das contributed to this article.

Write to Kirsten Grind at [email protected]