Index funds eliminate the risks of individual stocks, market sectors, and manager selection. Only stock market risk remains.

— John C. Bogle

Bashful Index Funds quotations

If you invested in a very low cost index fund - where you don't put the money in at one time, but average in over 10 years -you'll do better than 90% of people who start investing at the same time.

A low-cost index fund is the most sensible equity investment for the great majority of investors. My mentor, Ben Graham, took this position many years ago, and everything I have seen since convinces me of its truth.

Most investors would be better off in an index fund.

A minuscule 4 percent of funds produce market-beating after-tax results with a scant 0.6 percent (annual) margin of gain. The 96 percent of funds that fail to meet or beat the Vanguard 500 Index Fund lose by a wealth-destroying margin of 4.8 percent per annum.

When you look at the results on an after-fee, after-tax basis over reasonably long periods of time, there's almost no chance that you end up beating the index fund.

By periodically investing in an index fund, the know-nothing investors can actually outperform most investment professionals.

After a lifetime of picking stocks, I have to admit that Bogle's arguments in favor of the index fund have me thinking of joining him rather than trying to beat him. Bogle's wisdom and common sense are indispensable... for anyone trying to figure out how to invest in this crazy stock market.

The S&P is up 343.8 percent for 10 years. That is a four-bagger. The general equity funds are up 283 percent. So it's getting worse, the deterioration by professionals is getting worse. The public would be better off in an index fund.

The best way in my view is to just buy a low-cost index fund and keep buying it regularly over time, because you'll be buying into a wonderful industry, which in effect is all of American industry... People ought to sit back and relax and keep accumulating over time.

Index funds have regularly produced rates of return exceeding those of active managers by close to 2 percentage points. Active management as a whole cannot achieve gross returns exceeding the market as a while and therefore they must, on average, underperform the indexes by the amount of these expense and transaction costs disadvantages.

It's bad enough that you have to take market risk.

Only a fool takes on the additional risk of doing yet more damage by failing to diversify properly with his or her nest egg. Avoid the problem-buy a well-run index fund and own the whole market.

Index funds do not trade from security to security and, thus, they tend to avoid capital gains taxes.

I was involved with Wells Fargo Bank as a consultant in the late 1960s and early 1970s, when I suggested to them that they develop a product that has become known as index funds.

... the best way to own common stocks is through an index fund.

We can extrapolate from the study that for the long term individual investor who maintains a consistent asset allocation and leans toward index funds, asset allocation determines about 100% of performance.

Most of the mutual fund investments I have are index funds, approximately 75%.

Index funds are the only rational alternative for almost all mutual fund investors.

Assuming that the future is like the past, you can outperform 80 percent of your fellow investors over the next several decades by investing in an index fund-and doing nothing else. But acquire the discipline to do something even better: become a long-term index fund investor.

Our standard prescription for the know-nothing investor with a long-term time horizon is a no-load index fund. I think that works better than relying on your stock broker. The people who are telling you to do something else are all being paid by commissions or fees. The result is that while index fund investing is becoming more and more popular, by and large it's not the individual investors that are doing it. It's the institutions.

The key aspect of an index fund is that many of them, not all of them, but many of them are extremely cheap.

An index fund is a fund that simply invests in all of the stocks in a market.

So, for example, an index fund might invest in every single stock or almost every single stock in the U.S. market, it might invest in every single stock abroad, or it might invest in all of the bonds that are out there. And you can make a perfectly fine investing portfolio that mixes equal parts of all three of those.

Invest in low-turnover, passively managed index funds.

.. and stay away from profit-driven investment management organizations... The mutual fund industry is a colossal failure... resulting from its systematic exploitation of individual investors... as funds extract enormous sums from investors in exchange for providing a shocking disservice... Excessive management fees take their toll, and manager profits dominate fiduciary responsibility.

While it is probably a poor idea to own actively managed funds in general, it is truly a terrible idea to own them in taxable accounts... taxes are a drag on performance of up to 4 percentage points each year... many index funds allow your capital gains to grow largely undisturbed until you sell... For the taxable investor, indexing means never having to say you're sorry.

... skepticism about past returns is crucial. The truth is, much as you may wish you could know which funds will be hot, you can't - and neither can the legions of advisers and publications that claim they can. That's why building a portfolio around index funds isn't really settling for average. It's just refusing to believe in magic.

The commission of the investment sins listed above is not limited to 'the little guy.' Huge institutional investors, viewed as a group, have long underperformed the unsophisticated index-fund investor who simply sits tight for decades. A major reason has been fees: Many institutions pay substantial sums to consultants who, in turn, recommend high-fee managers. And that is a fool's game.

I'm making a case against how money managers are handling customers' money.

The objective of the customer is not being met if the fund managers are diversifying their assets into hundreds of businesses. If they do this, they are typically performing close to the indexes. But that's not the way wealth is created.

Most investors, both institutional and individual, will find that the best way to own common stocks (shares') is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) of the great majority of investment professionals.

Building a portfolio around index funds isn’t really settling for the average.

It’s just refusing to believe in magic.

I am a huge, huge, huge fan of index funds.

They are the investor’s best friend and Wall Street’s worst nightmare.