Mr. Bogle, an invaluable voice of reason for investors over many years, suggests that there is too much speculation in our equity markets.
Click here to see the short interview.
His comments jibe entirely with my post, Rise of the Speculative Movement.
His assertions are backed by excellent stats:
- SPDR S&P 500 (SPY) turns over 10,000% per year
- Markets direct $200 billion/yr to new investments compared to $40 trillion/year in trading
To the extent that investing is supposed to be the process of directing “capital to its highest and best use”, our financial system is clearly failing society while, quite meaningfully, enriching the middle men, i.e. Wall Street.