Skip to Content
Investing Specialists

How to Safely Use Vanguard's Arsenal of 'Beautiful Shotguns'

Vanguard has expanded its ETF lineup and waived brokerage commissions on them. What's a long-term investor to do?

Mentioned: , , , , , , , , ,

Bogle's Folly is about to become a "beautiful shotgun." In fact, Vanguard now has a closet full of "shotguns" that are more accessible than ever. How do investors use them without collateral damage?

Vanguard's plans to finally add a rock-bottom-priced ETF share class to the  Vanguard 500 (VFINX), the first index mutual fund (which skeptics dismissed as Bogle's Folly when firm founder Jack Bogle launched it in 1976), makes Vanguard an even more interesting place for ETF investing. That may be to the chagrin of Bogle, who once likened ETFs to "beautiful shotguns"--great for hunting, but also good for suicide. Like it or not, though, Vanguard this year has given ETF investors a lot more freedom and flexibility, first by offering commission-free trades on its own ETFs, then by planning to expand its ETF lineup to 66 to include funds tracking S&P and Russell indexes.

With great freedom, however, comes great responsibility. A smorgasbord of some of the lowest-cost, most tax-efficient investments available to retail investors can be had for no brokerage free at Vanguard, but Investors have to be careful not gorge themselves.

Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.