I am not a fan of index investing for 100% of anyone’s portfolio.  I like the idea of using index ETFs to rapidly increase or decrease exposure to equities but that’s about it.   Obviously, there are merits to index investing (such as diversification and transaction cost avoidance) and if you are the type of person that really likes to do no better or no worse than the market, then I guess index investing might be the thing for you.

John “Jack” Bogle is the father of index investing and the founder of Vanguard and according to CNBC, an investing “legend”.   Overall, I find him to be a very brilliant guy…so it’s really painful to listen to the first minute of today’s CNBC interview.   Click here.

Okay, so Bogle says…”Nobody should buy a stock.   Nobody should buy a bond.”   WOW!!  Of all the stupid things that are said on CNBC….this ranks right up there and coming from an “investing legend” it’s even worse.

If everyone took Bogle’s advice, there would be no stock market.   If nobody bought a stock and if nobody sold a stock, there would be no index.   There would be no index investing.  If nobody bought a bond, there would be no bond market.   In short, if everyone (the opposite of his “nobody”)  followed Bogle’s comments, there would be no finance.

Maybe you might interpret Bogle’s “nobody” reference to mean no individual investors.   So are you really going to leave the entire stock market and bond markets to mutual fund managers and by further specification, only index fund managers?   That’s absurd as well - just consider how they have done over the past 10 years.

At HEDGEfolios for the past 6 years,  I have consistently done what Bogle the “legend”, says nobody can or should do.  I have tried to show you it’s possible to take either long or short positions on 3,000 to 4,000 stocks and outperform the index.   So you won’t hear me tell you that “nobody should buy a stock.”  I’ll leave that up to the investing “legends.”