By lexaarts @ Adobe Stock
When there are three times as many mutual and ETF funds than the number of stocks available to invest in, Your Survival Guy thinks, “Houston, we’ve got a problem.” And we do. Because when Vanguard, BlackRock, State Street, and the like create funds to invest in, they’re picking stocks from a shrinking pool of securities. A couple of reasons are overregulation, more companies going private, new ones not considering going public, and big-cap companies gobbling up smaller rivals. It’s survival of the fittest.
What does that mean for the guy on Main Street? As a Vanguard investor, you own the fund. Much like telling a voter, “You control America.” Sounds good on paper, but you know the reality. Which brings me to the interview below with new Vanguard CEO Salim Ramji.
I’ve listened carefully and understand the pressure he’s under overseeing 20,000 employees and $9 trillion under management as he repeats the phrases “sense of purpose” and “sense of mission.” What does this “consultant speak” even mean?
The reality is that when your main product, the one that put you on the map, the passive index fund, is a commodity with zero fees, how does Ramji expect to “grow” his company? It must come from higher fees from services like investment advisory services or lower costs by shifting customer service to robo advisers or AI.
Action Line: Pay attention to your money. Be aware of the tectonic changes taking shape. If you’re ready to talk about a game plan, let’s talk. But only if you’re serious.
Originally posted on Your Survival Guy.
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