John Clifton "Jack" Bogle (May
8, 1929 – January 16, 2019) was an American investor, business magnate, and
philanthropist. He was the founder and chief executive of The Vanguard Group.
His 1999 book Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor became a bestseller and is considered a classic within the investment community.
After graduating fromPrinceton in 1951, Bogle narrowed his career options to
banking and investments. He was hired at Wellington Fund, where he showed great
talent and led the manager of the fund, Walter L. Morgan, to say, "Bogle
knows more about the fund business than we do." Bogle was promoted to an
assistant manager position in 1955, where he obtained a broader access to
analyze the company and the investment department. Bogle demonstrated
initiative and creativity by challenging the Wellington Wellington
In 1974, Bogle founded the Vanguard Company which is now one of the most respected and successful companies in the investment world. In 1999, Fortune magazine named Bogle as "one of the four investment giants of the twentieth century".
In 1976, influenced by the works of Paul Samuelson, Bogle founded First Index Investment Trust (a precursor to the Vanguard 500 Index Fund) as the first index mutual fund available to the general public. In a 2005 speech, Samuelson ranked "this Bogle invention along with the invention of the wheel, the alphabet, Gutenberg printing".
Bogle had heart problems in the 1990s and, in 1996, he relinquished his role as Vanguard CEO to John J. Brennan, his handpicked successor and second-in-command whom he had hired in 1982. Bogle had a successful heart transplant in 1996. His subsequent return to Vanguard with the title of senior chairman led to conflict between Bogle and Brennan. Bogle left the company in 1999 and moved toBogle Financial
Markets Research
Center
Bogle's innovative idea was creating the world's first index mutual fund in 1975. Bogle's idea was that instead of beating the index and charging high costs, the index fund would mimic the index performance over the long run—thus achieving higher returns with lower costs than the costs associated with actively managed funds.
Bogle's idea of index investing offers a clear yet prominent distinction between investment and speculations. The main difference between investment and speculation lies in the time horizon. Investment is concerned with capturing returns on the long-run with lower risk, while speculation is concerned with achieving returns over a short period of time. Bogle believed this is an important analysis to be taken into account as short-term, risky investments have been flooding the financial markets.
Bogle is known for his insistence, in numerous media appearances and in writing, on the superiority of index funds over traditional actively managed mutual funds. He contends that it is folly to attempt to pick actively managed mutual funds and expect their performance to beat a low-cost index fund over a long period of time, after accounting for the fees that actively managed funds charge.
Bogle argued for an approach to investing defined by simplicity and common sense. Below are his eight basic rules for investors:
His 1999 book Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor became a bestseller and is considered a classic within the investment community.
Investment Career
After graduating from
In 1974, Bogle founded the Vanguard Company which is now one of the most respected and successful companies in the investment world. In 1999, Fortune magazine named Bogle as "one of the four investment giants of the twentieth century".
In 1976, influenced by the works of Paul Samuelson, Bogle founded First Index Investment Trust (a precursor to the Vanguard 500 Index Fund) as the first index mutual fund available to the general public. In a 2005 speech, Samuelson ranked "this Bogle invention along with the invention of the wheel, the alphabet, Gutenberg printing".
Bogle had heart problems in the 1990s and, in 1996, he relinquished his role as Vanguard CEO to John J. Brennan, his handpicked successor and second-in-command whom he had hired in 1982. Bogle had a successful heart transplant in 1996. His subsequent return to Vanguard with the title of senior chairman led to conflict between Bogle and Brennan. Bogle left the company in 1999 and moved to
Investment Philosophy
Bogle's innovative idea was creating the world's first index mutual fund in 1975. Bogle's idea was that instead of beating the index and charging high costs, the index fund would mimic the index performance over the long run—thus achieving higher returns with lower costs than the costs associated with actively managed funds.
Bogle's idea of index investing offers a clear yet prominent distinction between investment and speculations. The main difference between investment and speculation lies in the time horizon. Investment is concerned with capturing returns on the long-run with lower risk, while speculation is concerned with achieving returns over a short period of time. Bogle believed this is an important analysis to be taken into account as short-term, risky investments have been flooding the financial markets.
Bogle is known for his insistence, in numerous media appearances and in writing, on the superiority of index funds over traditional actively managed mutual funds. He contends that it is folly to attempt to pick actively managed mutual funds and expect their performance to beat a low-cost index fund over a long period of time, after accounting for the fees that actively managed funds charge.
Bogle argued for an approach to investing defined by simplicity and common sense. Below are his eight basic rules for investors:
- Select low-cost funds
- Consider carefully the added costs of advice
- Do not overrate past fund performance
- Use past performance to determine consistency
and risk
- Beware of stars (as in, star mutual fund
managers)
- Beware of asset size
- Don't own too many funds
- Buy your fund portfolio – and hold it
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