Posted by Editor on September 3rd, 2008
John Bogle, the founder and retired CEO of the Vanguard Group, appeared on Bloomberg Television earlier today from Valley Forge, Pennsylvania. Bogle warned of “difficult economic times that very clearly lie ahead.” He added:
We’re going into something, or are in the midst of something, you might call the great unraveling, of all that excess credit, all that low-quality credit, that built up to such enormous levels in, say, the previous decade. So, that’s going to take a long time to unravel.
Bloomberg’s Betty Liu asked Bogle how far along he thought we were in the credit crisis. Bogle, who is still active with the second largest fund family in the country, replied:
None of us really know. I’m certainly among those that don’t know. But I’d say a third of the way through would be more like it. I’d say we have several more years to go. And they’re not going to be fun years for any of us.
He also added that he expects more bank failures and more bailouts during this time. According to Bloomberg, there have been $509.6 billion in credit losses and asset write-downs since the beginning of 2007.
You can view the 7 minute 12 second interview here.
Source:
John Bogle Interview
Bloomberg, September 3, 2008
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Posted by Editor on July 10th, 2008
Looks like the first six months of the year haven’t been too kind to U.S. hedge funds and stock mutual funds. According to the Internet news site NewsMax.com yesterday:
U.S. hedge funds, which often promise to make money in all markets, were in the red during the first half of the year but did not lose nearly as much as mutual funds, according to data released on Tuesday.
Hedge Fund Research said the average hedge fund is off 0.75 percent since January after slipping 0.68 percent in June.
Data from the Chicago-based firm, which specializes in alternative investment information, revealed that more funds went out of business during these first six months than a year ago in the same period. In addition, fewer new funds have started up.
“Please Stop The Pain”
The first half of 2008 wasn’t much better for mutual funds either. According to NewsMax.com:
Still, hedge funds compare very favorably with U.S. stock mutual funds, which lost an average of 10.09 percent in the first six months of the year, according to Lipper Inc, a unit of Thomson Reuters.
Sector stock funds lost 6.07 percent and world stock funds fell 11.54 percent, the Lipper data show.
It’s a good thing fund managers haven’t put a dime of their own money in domestic stock funds (46% of the time) and foreign stock funds (60% of the time) they’re paid to manage, right?
Source:
“U.S. Hedge Funds Lose in First Half, Mutual Funds Worse”
NewsMax, July 9, 2008
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