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529 Performance Risk
What if Indexing were MUCH Better?
Does it Make Sense to Pay Management Fees to get Under-performance?
The gentleman at right is (yes, another rich guy but also) one of the "Investment Giants of the 20th-Century," as he was called in 2004 by Fortune magazine. John C. Bogle founded The Vanguard Group of funds in 1974 and he has advocated for indexed fund investing almost ever since. Basically, an UNMANAGED index of stocks or bonds outperforms managed funds on a regular basis. If an unmanaged index outperforms the vast majority of money managers over time, why do investors keep paying fees and commissions in a futile effort to "beat the market?" More on John Bogle and indexed investing in a moment...
Why do parents pay brokers, funds and "sponsoring" states fees & commissions for 529 Plans' poor performance?
Perhaps it's because of terrific mutual fund industry advertising and hype. Certainly, Wall Street and mutual fund companies have larger advertising budgets than we do and they have a friendly media that has not looked closely at the mantra that 529s are the (only) way to save for college. Despite our limited size, relative to the investing marketing machines, we thought we'd provide some free information to help you decide whether active or passive investing makes sense. And whether paying high fees for a 529 Plan is your best college-savings option.
If active investing doesn't work well, what is it you're trying to achieve with actively-managed 529 Plan mutual funds? Why not contact us for better ideas? (click the article images below for more information.)