Dr. Ellen Quigley, Special Advisor to the CFO of the University of Cambridge who previously has given talks at EA Finance and the Stanford Existential Risk Initiative, recently was featured on the Bogleheads podcast. The late Jack Bogle was the founder of Vanguard, the multi-trillion dollar money management firm. Vanguard was the first firm to provide a low cost passive investing index fund that tracked the stock market. The mutual fund industry was dead set against it when it began, because they feared it would disrupt their profits through expensive fees. That said, there had been a small contingent of luminaries, such as Economics Nobel Prize winner Paul Samuelson and Warren Buffett, who long contended that for the everyday investor, with relatively little or no information about the markets, index investing that tracked the market average were by far the best way to invest in securities. In the decades that have followed since Bogle started Vanguard, research has consistently showed that index investing beats the vast majority of other professional investment strategies in the long run. What is interesting in the work of Quigley and her colleagues is that they show that not only is index investing profitable, it is also better at incentivizing socially responsible corporate behavior than traditional ESG and SR investing.
Advocates of index investing organized themselves as "Bogleheads" in honor of Jack Bogle. Before his death, Bogle started the Bogle Center, which promotes index investing and financial literacy. He handpicked its current leader, Rick Ferri, who hosts the Bogleheads podcast. I encourage everyone to catch Ellen's appearance on the Bogleheads podcast to learn about index investing and how it is more effective than traditional forms of socially responsible investing.
Also, for EAers who are looking for ways to passively increase their wealth to increase the amount they can donate, I encourage you to learn more about index investing. Some places to start include The Bogleheads' Guide to Investing, The Little Book of Common Sense Investing, and the Bogleheads Forum. The community of Bogleheads is a relatively wealthier community primarily organized around the idea that index investing produces a good financial return. If EAers became more engaged with that community, and helped make the ethical ethos of index investing become more prevalent within the community, then EAers may be able to convince them to direct more of their financial gains to EA causes minimizing suffering in the world.
