Recent posts by John Ameriks
John Ameriks leads Vanguard's Investment Counseling & Research group, which provides portfolio recommendations along with topical commentary and investment counseling.
In 1976, Vanguard launched its 500 Index Fund, making it the first index mutual fund available to non-institutional investors. The creation of an index fund intended for individual investors was an important salvo in the now long-running battle over which investing approach—active or passive—is superior.
This is a 35-year-old fight (at least) that I certainly don’t think I can settle. But in discussions of the issue over the years, I’ve found that a few points are really critical, and often not appreciated by more casual participants.
I realize this will be about my third post on this issue, but the things people are writing about 401(k)s just get more and more absurd, and it’s tough to sit by and let this go unchallenged.
Now the editors of The New York Times are claiming that “Even with recent stock market upswings, account balances are roughly 25 percent lower than before the crash.”
There’s been lots of talk since late last year about the plusses and minuses of financial engineering, including a debate (see blogs by Felix Salmon and Tyler Cowen) about the overall merits of various modern financial innovations. While it’s easy to pick on stuff like “NINJA” loans (No Income, No Job, No Assets) and various mortgage-backed securities as examples of financial innovations that we’d have been better off without, I think it would be foolish to let these mistakes convince us that we’d be better off going back to the barter system.
Following my recent post on 401(k) loans, a number of you asked for more detail on the rules around taxes on plan loans and repayments. So I thought I’d delve deeper into the topic of being (or not being) taxed twice.
One of our readers recently asked about Vanguard’s view on 401(k) loans.
As you might know if you’ve poked around Vanguard.com, we generally frown upon retirement plan loans, to put it mildly. In fact, Vanguard’s intranet for employees recently featured an article cautioning us against borrowing from our own retirement accounts.