Indexfundfan\’s blog (new URL is Indextown.com)

August 31, 2006

30 years of indexing (and 5 for me)

Filed under: Investing — indexfundfan @ 11:00 pm

Today, Vanguard celebrates 30 years of indexing with the original introduction of the First Index Investment Trust — now known as Vanguard 500 index fund — on August 31, 1976. It was the first index fund available to individual investors in the United States.

“The introduction of the First Index Investment Trust was one of the few truly seminal dates in the mutual fund industry,” said John J. Brennan, Vanguard chairman and CEO. “It offered the individual investor a broadly diversified, low-cost investment approach that wasn’t available before.”

The reaction to this momentous event from Wall Street was “a frown and a shrug”. Conventional wisdom said that only actively managed funds made sense for individuals. Why would anyone not try to beat the market?

Of course, now we know that history was re-written with the introduction of this fund. The Vanguard 500 index fund has also grown to become one of the largest funds in the world.

Below are some statistical snapshots of index funds:

2006-09-01-indexing-30-years.png

I started investing with Vanguard in August 2001. So, this month also marks my 5 year anniversary of investing with index funds.

Note: The article “Indexing turns 30, and the revolution continues” appears on the Vanguard website HERE.

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3 Comments »

  1. Hello indexfundfan, I really injoy this Blog I wrote to you on another site and today I foung this site(your site) And I would say that I’m going to stay invested 90% into ETF’s and Prob. forget individuals stocks. I think that over the long haul that I’ll be better off. I hope that you would give me advice on this if you don’t think that is good. Maybe some day I can call you on my dime and we can chat . My friends don’t save money and arn’t interested in investing. by for now From the Vacman

    Comment by Vacman — September 1, 2006 @ 8:21 pm

  2. Hi Vacman, thanks for your kind words and I remember you from thecornerofficeblog.

    Many academic studies have shown that holding individual stock has uncompensated risk which can be easily diversified away by holding diversified mutual funds or ETFs. For your investments, you do need to make an investment plan and follow through with it.

    I encourage you to visit Diehards.org, read through some of the posts and recommended books, and ask any investing questions you have there. Several very good investment book authors and knowledgeable investors make frequent postings there and are usually very helpful in answering any investing questions you might have.

    Comment by indexfundfan — September 1, 2006 @ 10:06 pm

  3. thanks indesfundfan, I’ll go over there and look and see what I can learn. Have a good 3 day weekend !!!!!!!!!!!!!!Vacman

    Comment by Vacman — September 2, 2006 @ 4:55 am


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