Here's a quote from the end of one of his speeches (Go to http://www.vanguard.com/bogle_site/bogle_speeches.html:
and click on the speech titled "In Investing, You Get What You Don't Pay For (February 2, 2005)"):
Don't take my word for it. Ask Warren Buffett. Ask his mentor, Benjamin Graham. Ask Jack Meyer, the remarkably successful wizard who tripled the Harvard Endowment Fund from $8 billion to $27 billion. Here's what he had to say:
"Most people think they can find managers who can outperform, but most people are wrong. I will say that 85 percent to 90 percent of managers fail to match their benchmarks. Because managers have fees and incur transaction costs, you know that in the aggregate they are deleting value. The investment business is a giant scam."
When asked, "can private investors draw any lessons from what Harvard does?" Mr. Meyer answered: "Yes." He then recounted the lessons. "First, get diversified. Come up with a portfolio that covers a lot of asset classes. Second, you want to keep your fees low.' That means avoiding the most hyped but expensive funds, in favor of low-cost index funds. No doubt about it. And finally, invest for the long term."
In a sense, Mr. Meyer is simply stating the obvious: the all-market index fund or the Standard & Poor's 500 Index fund is a far better way to investing than searching through a seemingly-endless list of the products of the marketing-driven, asset-gathering machine that characterizes today's mutual fund industry. Other types of equity funds may approach that simple ideal, and certainly some few will surpass it. But the odds of success, as I've shown you this evening are terrible. If that's not enough, ask any economist who's won the Nobel Prize. And if that's not enough, just use your common sense to think through what I've just said.