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tv   Maria Bartiromos Wall Street  FOX Business  June 10, 2018 7:00am-7:30am EDT

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you'd like to share with us? we'd love to hear it! send me an e-mail or go to our website, strangeinheritance.com. . but we do. have a great weekend. maria: and happy weekend. welcome to the program that analyzes the week that was and helps position you for the week ahead. i'm maria bartiromo. coming up, legendary invest vetter van forward group founder is our guest this weekend. first the fox business newsroom with the headlines, from wall street to main street. >> maria, trade will be on everyone's mind as the g-7 nations meet this weekend in question back. the steel steel and aluminum tas imposed on the eu, mexico and canada. mexico announced they're
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imposing 3 billion on tariffs in u.s. agricultural e ports. investors able to shake off the trade ward war a war as the inds finished. the deal with zte includes a billion dollar penalties and a compliance team chosen by the u.s. the sanctions were a barrier to the u.s.-china trade deal. dpoib in hot water after revealing it had data partnerships with four chinese companies since 2010. one of those companies has a close relationship with the chinese government and had be flagged a national security threat. the agreement gave the company private access to user data. facebook says it's winding down that deal. and anyone looking for a job right now can find one. the labor department reported the u.s. had more job opening than unemployeds americans this
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spring. job opening at the end of april rose to 6.7 million americans as more than 6.3 million unemployed during this same period. this is the first time that's happened since they started keeping records back in the year 2000. back over to you. maria: thank you so much. this coming week is shaping up to be a huge run. president trump's biggest week on the international stage so far for sure. this weekend this president can expect tough talk with his counter parts in quebec at the g-7 summit. last week the united states announced new tariffs on steel and aluminum for the eu, canada and mexico, after the president warned he was doing it. then the president will head to singapore where he could see history in the making as the united states and north korea begin their nuclear summit. that summit happens on tuesday and we'll be live early 5 a.m. eastern here on the fox business network. joining me to talk about the week ahead and the week that was
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is cries teen ya along with james freeman of "the wall street journal." your thoughts as we approach this historic summit on tuesday. what are you looking for, what's most important, how should we be looking at the meeting? >> i guess my expectations are low and i'm kind of wondering why this is happening. especially with the president saying this week this might be a process that goes years into the future. no. no. the only reason we should be giving this dictator a meeting is if he's delivering something now. >> right. you're right. and he said denuclearization going into it. we haven't heard that that's exactly the format though, what he's planning on doing. >> the fact that president trump said yesterday, that he would give maybe a meeting or invite the leader of north korea to the white house when that's reserved as a privilege to come to the white house. if we're talking about what's to be expected, will the president of the united states, will he sign a peace treaty with north korea. because officially the korean
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war hasn't ended. that's a major hurdle. talk about military presence and that's going to affect japan which is why abe has had so many talks with the president this they don't have an official army. and if the united states leaves south korea, that could be bad news for japan. those are two things i would be kshed about in the normalization talk. maria: china helping north korea get to the table. china, we think, helped president trump in terms of encouraging the north to actually begin discussions. let's talk trade for a minute. because we know that this aluminum and steel tariffs are being debated across business right now. when it comes to china, i think we both agree, that something needed to be done because they steal our technology and intellectual property. where are you in terms of china and the trade tariffs? >> i think this is -- talking about this g-7 meeting, this is an area where the president might be able to find some common ground. if he decides maybe before
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leaving early that he doesn't want to spend the two days locked in a room with politicians arguing about the tariffs, maybe he ought to be saying to his colleagues among the democracies of the world, let's focus on china, let's lower barriers, but let's think about how we make the rule of law occur there in terms of companies, not being forced to share, not being forced to do business with chinese partners they don't want to. maria: this is an important point you bring up. we know he's walking into a room where there's tension, right? because we know what justin trudeau said about tariffs retaliatory tariffs, the european union doing the same thing. this is an out and out trade war? >> i think we've hit that point everybody came back with retaliation. mexico a 20% tariff on pork affecting american companies that supply work, like tyson.
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i think it's more seriously a family feud. and president trump is going to be meeting separately with canada as well as france. there could be some discussions there that could potentially ruin and a halfty and aruin an . why is he meeting with france? they can't create a bilateral agreement because they're part of the eu. it's going to be talk about getting the bromance going. obviously talking about tariffs. i don't think it's going to be pleasant. maria: great to see you both. up next, investing legend vanguard founder jack vogel joins me. that's next. stay with us one of the legends in the business world. what has changed about the investing business since jack vogel got his start. >> everything has changed. >> e we'll have more of me rrhea's interview with jack
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maria: welcome back. our next guest is a legend in the investing world, jack bogle founded the vanguard group in 1974, turning it into the largest mutual fund company in the world. the vanguard 500 index that bogle started and created in 1975 was the first low-cost index mutual fund designed for the average investor. jack named by fortune magazine as one of the four giants of the 20 century i the investigationment industry. invt industry. he'll talk to us about his new book. jack bogle is with us this weekend. thanks for joining us. >> my pleasure, maria. always. maria: let me start off with news of the week. this week we learned that household wealth reached a milestone, jack, $100 trillion. americans wealth surpassed $100 trillion mark for the first time early this year, which is an incredible number and that
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has to do with stock investing and the price of the homes. jack bogle, you are the pie mere in this business. what has changed since you started vanguard? >> i guess i would start by saying everything has changed. the mutual fund business is a totally different business. it's now probably 70% of the cash flow, sometimes 100% of the cash flow is going into index funds, which isn't exist when i started vanguard all those years ago. and indexing is up to i think around 45% of mutual fund, equity mutual fund assets. so it's been a reev revolution, indexing has, and it's changed the nature of how people look at investing. and most important of all, it's made people start to think about cost. cost is everything in this business. because when you think about it, where are returns generated for we investors. they're generated by corporate
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america. they earn money, they pay dividends, they reinvest the remained ner the business and that's where value is created. the financial markets are the way we access that value. but the financial markets don't give us all of it. they take their share first and then give us what's left. being we investors. so anytime you can shorten the gap, bridge the gap, minimize that gap is a good thing for the american investors. maria: you make a great point about cost. people are not focused on that until you put it front and center with such low fees at vanguard and now you've got industry of industry trying to copy vanguard, whether it's the index industry or brokers trying to take tear fees down. is this a race to the bottom, jack, in terms of how low fees are gone? >> well that's really a great question, maria. most of the fee competition in truth is in the etf, exchanges trade and fund area, because
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that's where a lot of the activity is, a lot of the cash flow is. and the competition is moderate for actively managed funds and really very light for what i call traditional index funds, tes, index funds, tifs, i should say, index funds of the type i started in 1975 that are bought and held together forever. let me explain it this way. we changed the business, the indexing business from an index passive index held by passive investors to passive indexes held by active investors. a lot of trading going on in etf land and that's not such a good thing. that's where the competition is, because you can make money starting a little company, i call them financial buccaneers, trying to find a little hole that nobody else has filled, a little niche if you will.
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and in the other -- there's not much appetite in the traditional index fund business for lower cost because, as i say, often said, the problem with index. funds is all of the darn money goes to the investors. and the mutual fund business is a business that is people coming to the fund business to make money for themselves and their management companies. they want to make money for their investors, sure. but the more the management company takes twb less the investor makes. maria: and that's the issue. a lot of people don't realize that. the first question is how much is it costing you. the money is coming out of your returns. jack, how do you answer the criticism -- i saw in your interview recently about the critics of the index fund today saying that you're not allocating capital properly. it's because the biggest stocks make up the biggest percentage of most of the indexes, mike voft, 3.2% of the s&p 500 and
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walmart is half a percent. new money means that the large stocks take a proportionately more money than other stocks. so is that destabilizing? >> that's not only not destabilizing, maria, it's not true. in other words, if we have 4% of assets in alphabet or google, we put 4% of our new money into that. if we have half a percent in walmart, as you said, we put half a percent, it doesn't change the equation. we're investing based on the market values of the company. and when the prices go up, the prices go up in the regular market, if you will, by individual investors, but they also go up for the index fund. maria: okay. >> rising prices creates zero capital allocation issues.
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jack bogle revolutionized the world of investing. what does he think of the index funds? >> we don't need 5,000 index funds6 thowks. >> we'll have that and more hi.i just wanted to tell you that chevy won a j.d.power dependability award for its midsize car-the chevy malibu. i forgot. chevy also won a j.d. power dependability award for its light-duty truck the chevy silverado. oh, and since the chevy equinox and traverse also won chevy is the only brand to earn the j.d. power dependability award across cars, trucks and suvs-three years in a row. phew. third time's the charm... this is not just a yard. it's where memories are made. and you have the best seat in the house.
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welcome back to wall street. here's more of maria's interview with investing legend vanguard founder jack bogle. maria: look at how many index funds there are. 5,000 index funds today versus the numb or f stock lower, 3,385 stocks. what does that tell us? >> it tells us that people are crazy, maria. we don't need 5,000 index funds or 6,000. the whole idea of index funds was simplify, simplify,
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simplify, right out of ralph wall do emerson. semp fisimplify everything. we've now complicated it by giving people many choices and building a system where they can trade those choices in the gloat growth and out of value and so on. so there's too much trading going on, which is the investor's enemy finally. the answer is to buy and hold the stock market very well exemplified by the 500, and hold it forever. and that's the winning strategy. any other strategy involves changing things. and over an investment lifetime you could probably have 40 changes, 50 changes. there's in way that can be a winning strategy. maria: you make a really good point. what about the idea that people want to cash out sometimes. i mean, what are your most important issues in terms of selling? you say hold on for a long time. but what is a long time? when can you actually get those
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returns and what do you look for as a run to sell, jack? >> that's a great question. i guess my fair time period is the same as warren buffet's time period, forever. you know fb fo, for your whole . there will be opportunities along the way. we've seen them in the last 25 years. to get out and get back in. maria: vanguard is changing. the retirement plan. not having the flagship s&p 500 fund in the 401(k). why is that. what is your reaction to the fact that vanguard is dropping 12 funds from the employee 401(k) retirement plan? it will now offer 15 funds, down from 27. why? >> well, the answer is that companies all over the country, and i presume vanguard, although i don't run this place anymore, there have been too many choices in retirement plans. you could run a retirement plan with three or four choices with abstock index fund, a bond index
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fund, a balanced inducks fund and that could be it and investors can make the choices easily. an asset allocation issue. and by giving them quite so many issues at vanguard, not in the industry generally, we've confused investors. for vanguard in particular, this is not going to surprise you, i think it's too bad not to have the 500 as an option. but it's pretty much indifferent from an investment standpoint because our crew members, as we call them here and bogle himself, just go into the total stock market fund which is 85% of the s&p 500 any way. i like the s&p 500 but i'm perfectly satisfied with the vanguard total stock market index fund. a little broader. maria: what do people need to know about their 401(k) plan. i feel like people put their money in the 401(k) and they don't necessarily know what the plan is invested in. is there any advice you want to
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give us in terms of managing their 401(k) plan? >> well, the less you manage your 401(k) plan the better. make some choices, asset allocate -- allocate your assets, to some degree based on your age, and you can do that of course through these popular target date retirement plans in which vanguard is so totally dominant it's almost not worth talking about, and gradually build up a bond position over a period of time. but the other option is even simpler and that is buy the balanced index fund, you'll be 60% in stocks and 40% in bonds for the rest of your life and that may even be a better strategy. only time will tell. maria: it's so important, jack, just this week we learned that the social security fund is going to be tapping into its fund for the first time in 36 years. people need to understand social security may not be there for you when you retired. the 0 now onus is on individualo
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make sure they have a 401(k) and savings in the stock market, correct? >> that's correct bts. i wouldn't write off social security quite so soon. i don't thini don't think the nl policy of the united states of america, i believe that policy precludes a significant reduction in social security. and to me it's kind of sad that we could fix wit such tiny little changes, change the retirement age a little bit, make the social security minimum wage deduction wage based deduction a little higher and all of the suds it would be fixed. maria: our thanks to jack bogle for joining us. say carl, we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering?
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what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.
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we'll get the latest federa fedl reserve comments about the economy. and we're expecting the fed to raise interest rates in the coming week ahead. we'll get earnings from h and r block, lands end and oxford industries. on tuesday, tuesday june 12th, the big e gentleman, when president trump will meet with kim jong-un in singapore we'll be live throughout the meeting and starting early here on the fox business network, joining me at 5 a.m. on tuesday. on wednesday the fed will announce the decision on interest rates. we're expecting a hike of a quarter of a point. powell will have a news conference at 2:30 p.m. eastern which we'll carry live. we'll get the latest on producer prices. ppi index as well as earnings from keller brands. on thursday, we'll get data on
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retail sales, import prices and inventories. friday we get the week -- we end the week from the empire state manufacturing survey and consumer sentiment. a big week ahead. possible history in the making as i mentioned, the u.s.-north korea summit beginning on tuesday in singapore. tune in to the fox business network. we'll have around the clock coverage of the historic event. mornings with maria will go on 5 a.m. eastern. one hour earlier. join me next week, talking with the deloitte ceo and former home depot ceo. nar deli a long time ge ear. we'll talk to us about general electric as well. i'll see you sunday on sunday morning futures, catch the program 10 a.m. eastern. big program this weekend when i speak with bob goodlatte, the chairman of the house judiciary committee. along with the former canadian
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prime minister. that is sunday 15 a.m. eastern. we'll talking tariffs and nafta with stephen harper. that will do it for us. thanks for joining me. i'll see you again next time. >> i'm bob massi. for 34 years, i've been practicing law and living in las vegas, the center of the recent real-estate crisis. lives were destroyed from coast to coast as the economy tanked. now, well, it's a different story. the american dream is back. and nowhere is that more clear than the sunshine state of florida. so we headed from the strip to the beach to show you how to live the american dream. i'm gonna meet real people who are facing serious problems, take you behind the gates of properties you have to see to believe and give you the tips that everyone needs to navigate the new landscape. because information is power. and the property man has got you covered. [ woman vocalizing ]

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