Benjamin Graham: Passive advocate?

The ‘father of value investing’ became ever more sceptical about stock picking but would he have endorsed index funds?

Justin Reynolds


"A low-cost index fund is the most sensible equity investment for the great majority of investors. My mentor, Ben Graham, took this position many years ago, and every thing I have seen since convinces me of its truth."

Such at least was the ‘personal assurance’ given by Warren Buffett to Vanguard founder Jack Bogle, quoted in Bogle’s 2006 book The Little Book of Common Sense Investing.

Bogle’s was a characteristically bold contribution to the ongoing contest among rival schools of investment to claim the legacy of Benjamin Graham, the most widely read finance writer of the20th Century.

Graham’s The Intelligent Investor, described by Buffett as “by far the best book on investing ever written”, has gained something of the status of sacred scripture since its first publication in 1949, the current edition, supplemented with commentaries by Buffett and others, now runs to more than 600 pages and reads like an annotated Bible.

This article first appeared in ETF Insider, ETF Stream's monthly ETF magazine for professional investors in Europe. To read the full article, click here.

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