We Study Billionaires - The Investor’s Podcast Network

TIP743: Should Value Investors Own Index Funds?

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Aug 8, 2025

Discover how John Bogle revolutionized investing with his philosophy on low-cost index funds, making investing accessible to millions. Learn why most active mutual funds struggle to beat the S&P 500 and how fees can silently chip away at your gains. Explore the ease of holding index funds during market downturns, making them a reliable option for investors. The discussion also touches on future market returns and why simple strategies often outperform complex ones.

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INSIGHT

Bogle's Market Ownership Insight

John Bogle showed that owning the entire market through an index fund beats trying to beat it.
Most active investors underperform the market due to fees and human behavior.

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ANECDOTE

Gotrocks Family Indexing Parable

The Gotrocks family owned all U.S. stocks but lost wealth due to costly trading and taxes.
Their wealth grew again only after returning to passive index investing.

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ADVICE

Minimize Fees to Maximize Wealth

Avoid high fees; even 1% fees can cost hundreds of thousands over decades.
Choose low-cost index funds to maximize long-term investment returns.

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The Legacy of Index Investing and Bogle's Philosophy

02:26 • 4min

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The Case for Index Funds

06:33 • 9min

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Investing Beyond the Hype

15:39 • 6min

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Understanding Market Returns and Investment Strategies

21:30 • 15min

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Navigating Investment Strategies

36:14 • 9min

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Navigating Index Investing and Market Volatility

45:27 • 18min

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#19

• Mentioned in 246 episodes

The Psychology of Money

Timeless Lessons on Wealth, Greed, and Happiness

Morgan Housel

In 'The Psychology of Money,' Morgan Housel delves into the psychological and emotional aspects of financial decisions. The book consists of 19 short stories that illustrate how personal history, worldview, emotions, and biases influence financial outcomes. Housel emphasizes the importance of behavior over knowledge in managing money, highlighting the power of compounding, the dangers of greed, and the pursuit of happiness beyond mere wealth accumulation. He advocates for a frugal lifestyle, long-term perspective, and a balanced approach to investing, stressing that financial success is more about mindset and discipline than about technical financial knowledge.

#1382

• Mentioned in 18 episodes

The Little Book of Common Sense Investing

John Bogle

#9066

• Mentioned in 3 episodes

The Bogle Effect

How John Bogle and Vanguard Turned Wall Street Inside Out and Saved Investors Trillions

Eric Balchunas

The Bogle Effect explores the profound influence of John Bogle on the financial industry. Bogle, the founder of Vanguard, democratized finance for retail investors by introducing low-cost index funds and a unique mutual ownership structure. The book, written by Eric Balchunas, delves into Bogle's philosophy, his vision for reducing costs and increasing investor returns, and the far-reaching impact of his innovations on areas such as active management, ETFs, advisory services, quantitative investing, ESG, behavioral finance, and trading platforms. Through exclusive interviews with Bogle and those who knew him, the book provides a comprehensive portrait of Bogle's life and legacy, highlighting his commitment to providing value to investors and his role in saving investors trillions of dollars through lower fees and efficient market strategies.

#56

• Mentioned in 150 episodes

The intelligent investor

Jason Zweig

Benjamin Graham

Written by Benjamin Graham, 'The Intelligent Investor' is a seminal work on value investing that has inspired millions since its original publication in 1949. The book emphasizes the importance of distinguishing between investing and speculation, calculating the intrinsic value of companies, and maintaining a margin of safety. The revised edition includes updated commentary by Jason Zweig, who provides modern examples and insights to help readers apply Graham's principles in today's market. Warren Buffett, a disciple of Graham, has praised the book as 'the best book about investing ever written'.

#566

• Mentioned in 34 episodes

Just Keep Buying

Nick Maggiulli

In this episode, Clay shares John Bogle’s timeless philosophy of passively investing in low-cost index funds. Bogle, the founder of Vanguard, helped spark a global movement that has made investing more accessible and cost-effective. Today, Vanguard manages over $10 trillion in assets, and Bogle’s simple approach has been adopted by millions worldwide, collectively saving investors trillions of dollars in fees over the years.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro 03:34 - How John Bogle’s index fund philosophy revolutionized investing. 05:46 - Why most active mutual fund managers underperform the S&P 500 over time. 25:11 - How to estimate realistic future returns for the S&P 500. 31:50 - How fees and taxes quietly erode investment returns. 50:23 - Why index funds are easier to hold onto during market crashes. 52:11 - Why Clay chose not to invest in index funds at this point in his investment journey.

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join Clay and a select group of passionate value investors for a retreat in Big Sky, Montana. Learn more ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.
Join the exclusive ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠TIP Mastermind Community⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
John Bogle’s book, The Little Book of Common Sense Investing.
Nick Magguilli’s book, Just Keep Buying.
Related Episode: MI167: The Bogle Effect w/ Eric Balchunas.
Related Episode: TIP709: The Art of Long-Term Investing w/ Francois Rochon.
Related Episode: TIP734: My Investment Philosophy w/ Clay Finck.
Follow Clay on X and LinkedIn.
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