Jack Bogle transformed the investment management industry. Over a career lasting nearly half a century, Bogle was a crusader for individual investors, working to bring the interests of asset managers in line with those of their investment clients.
In 1975, Bogle founded the Vanguard Group, structuring the business as a mutual company, meaning that Vanguard is owned by the funds it manages and, as a result, the funds’ investors. A year later, Bogle and Vanguard introduced the first ever index mutual fund available to the general public, aiming to track the performance of the broader market while charging the lowest fees possible. At first, many in the investment industry snickered at Vanguard’s new index funds, but over time Bogle’s idea took hold. While maintaining some of the lowest fees in the business, Vanguard has grown its assets under management from $1.8 billion at its founding to $5.3 trillion as of September 30, 2018, making Vanguard the second largest asset manager in the world.
Despite Vanguard’s incredible success, Bogle didn’t become fantastically rich. Instead, Jack passed on as much savings as possible to Vanguard investors, bringing fees for his funds to razor-thin levels (and dragging the rest of the fund market with him). As a result, Bogle helped all investors get better returns on their retirement savings, drastically reducing underperformance caused by high management fees. As Bogle said in 2012, “My ideas are very simple. In investing, you get what you don’t pay for.”
All investors are indebted to Jack Bogle for his efforts over 40+ years to make the investment industry better serve the interests of individuals. As we remember Bogle’s life and his contributions, we hope you’ll enjoy this conversation between Bogle and Motley Fool Motley Fool CEO Tom Gardner recorded in 2016.
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Jack Bogle: The Visionary Behind Index Funds, Vanguard, and Timeless Investing Advice
When it comes to investing, one name that stands out above all others is that of John C. Bogle, widely known as Jack Bogle. Bogle was one of the most influential figures in the finance world, revolutionizing investing with the introduction of index funds and establishing Vanguard Group, one of the world’s largest investment management companies. His investment philosophy and timeless advice still resonate strongly with investors today.
Born on May 8, 1929, in Montclair, New Jersey, Bogle displayed a deep interest in finance from an early age. After graduating magna cum laude from Princeton University, he went on to carve a path for himself in the investment industry. Bogle’s career took off when he founded Vanguard Group in 1974, with the primary aim of offering low-cost mutual fund options to everyday investors.
However, it was Bogle’s invention of index funds that truly transformed the investment landscape. In 1975, he launched the Vanguard 500 Index Fund, the world’s first index mutual fund. The fund aimed to mirror the performance of the S&P 500 index, a benchmark for the U.S. stock market. This innovation allowed investors to gain exposure to a diverse range of stocks without the need for extensive research or the expensive management fees associated with actively managed funds.
Bogle firmly believed in the power of low-cost passive investing through index funds. His philosophy was centered on the idea that actively managed funds often fail to consistently outperform the market in the long run. He argued that high fees, excessive trading, and an inability to consistently pick winning stocks hurt the performance of actively managed funds. Instead, Bogle championed the idea of capturing the market’s returns as a whole, rather than trying to beat it. This belief came to be known as “Bogle’s paradox,” where he believed that the average investor would be better off by being an average investor.
Bogle’s approach to investing wasn’t limited to the financial realm alone; it had a strong moral compass as well. He often spoke out against excessive CEO compensation and the influence of Wall Street on Main Street. He believed that investment management should prioritize the interests of individual investors, rather than profit-driven motives.
Throughout his career, Bogle emphasized the importance of long-term investing and asset allocation. He consistently advised investors to diversify their portfolios and remain committed to their investment strategy, irrespective of short-term market volatility. Bogle cautioned against market timing, frequent trading, and trying to predict the future. His famous investing mantra was, “Don’t peek, don’t panic, and don’t think you’re smarter than the market.”
Bogle’s contributions to the investment industry were widely recognized. In 1999, Fortune magazine named him one of the investment industry’s four giants of the 20th century. He received countless accolades, including being awarded the Lifetime Achievement Award from the Mutual Fund Industry, Investment News’ inaugural Lifetime Achievement Award, and the prestigious CFA Institute’s Investment Management Award.
Sadly, Jack Bogle passed away on January 16, 2019, at the age of 89. However, his legacy lives on through Vanguard, which now manages over $9 trillion in assets, and his influence on investors worldwide.
In conclusion, Jack Bogle’s pioneering work in index funds, his establishment of Vanguard Group, and his principled investing advice have left an indelible mark on the investment industry. His unwavering belief in the benefits of passive investing, long-term thinking, low fees, and ethical considerations has provided investors with valuable guidance that continues to shape their financial journeys. Jack Bogle will always be remembered as a visionary who revolutionized the world of investing and helped countless individuals secure their financial future.
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Investing in the stock market has HISTORICALLY provided higher returns than other forms of investment. According to Morningstar, the average annual return for the S&P 500 index, which measures the performance of 500 large-cap stocks, was approximately 10% from 1926 to 2020.
For first-time investors, it cannot be stressed enough how important it is to invest hard-earned money in the stock market rather than a bank where interest is guaranteed! The market appears out of control, the times are unpredictable, and the banks are deteriorating. Could there be a chance for a boomer like me? I'm working on a rough estimate of $5M for retirement, and I have a healthy six figures saved up for this. I'm almost 60.
Jack didn’t need billions of personal net worth. As he said it was “enough”
Just think how embarrassing it is for those that made 10x or 100x what he did knowing they stole it from their customers with fees they in no way deserved.
Smh
The old saying is "tell me who is your friend and I will tell you who you are…" Bogle is calling Ramsfeld, a war criminal hyena whose place is on an electric chair, a dear friend. There is another old saying, "there is a crime behind every big wealth". That makes Bogle and his Vanguard twice criminal. Whatever bullshit he is selling here is good for nothing old crap. Capitalism is dead and those like Bogle are trying to maintain their way of stealing and controlling our financial privacy by replacing the State with corporate fascist dictatorship.
The market trend can turn around very quickly. In fact, the indexes often switch from a bear market to a bull market when the news is at its worst and the mood of investors is at its lowest point. I read an article of people that grossed profits up to $150k during this crash, what are the best stocks to buy now or put on a watchlist?
I used to think every investor lose out during recession, meanwhile some make millions. I also thought everybody went out of business during the Great Depression, but some went into business. Bottom line, there's always depression for some, and profit for others, it all starts from having the right mindset. That said, I've set asides $250k to invest for future, unfortunately I'm a complete noob.
My father told me never trust these guys, he grew up in the depression. He died and I Iinherited about $70K. I didn't follow his advise and invested with one of these guys. My $70K became $58K in one year. And he charged me for the honor.
As an investing enthusiast, I often wonder how top level investors are able to become millionaires off investing. I do have about $70k amount of capital to start up but I have no idea what strategies and direction I need to approach to help me make decent returns
I began my investment journey at the age of 38, primarily through hard work and dedication. Now at the age of 42, I am thrilled to share that my passive income exceeded $100k in a single month for the first time. This success reinforces the importance of the advice mentioned earlier. It is not about achieving quick wealth, but rather ensuring long-term financial prosperity
I am aware that continuing to invest during periods of volatility can be a smart way to build wealth. I’ve heard testimonies of people accruing over $250k this red period. What measures can I take to ensure this?
After a terrible 2022, shell-shocked financial backers have a lot to think about and losses to recover from. An expansion report and a wealth of other data did little to alter assumptions that the Central bank would likely keep raising interest rates regardless of whether the economy slows down. This implies that portfolios will experience more losses during the first quarter of 2023. I'm currently at a crossroads deciding whether to exchange my $250k security/stock portfolio; how might the continuous market volatility work to my advantage?
Pure gems by Bogle! The man did more for the people then his pockets. He could have been a billionaire many times over. IMHO he is the "greatest" investor ever because of the 2nd order wealth that he created for the public.
When taxes and fees are factored in there is no better choice than a market index for any extended period (say 10 years or more). The best analogy I can give you is the following: I am telling you BEFORE a 15 horse race starts which horse is guaranteed to finish 2nd. If one is foolish enough to say "I will ignore that advice as I think I can pick the winner" than so be it. You can make a hell of a lot of money knowing which horse finishes 2nd.
Love the answer “it’s real easy, most people in this business trying to make money for themselves and not the shareholders “. ….and in the process he made a shit ton of money for his self
I am convinced that these money managers over complicate things on purpose. A simple index fund can make anyone rich over time.
The market's direction can swiftly change, with indexes frequently transitioning from a bear market to a bull market precisely when the news is most negative and investor sentiment reaches its lowest point. I came across an article highlighting individuals who achieved profits of up to $150,000 during challenging market periods. Considering this, I am curious about the best stocks to purchase now or add to a watchlist.
Once upon a time, I was an eager investor. With high hopes and dreams, I diligently built my investment portfolio over the years. But as the tides of the market turned against me, my once-promising investments began to crumble. Stock prices plummeted, bonds defaulted, and my hopes faded away. With each passing day, my portfolio dwindled, mirroring the sinking feeling in my heart. I watched helplessly as my hard-earned savings vanished, leaving behind a lingering sadness and a stark reminder of the unpredictability of the financial world. I'm here again because I want to get back on track.I need ideas to get on on a recovery process
Things are strange right now. The US dollar is becoming less valuable because of inflation, but it's getting stronger compared to other currencies and things like gold and property. People are turning to the dollar because they think it's safer. I'm worried about my retirement savings of about $420,000 losing value because of high inflation.
Vanguard and Black Rock?
Thank you Jack.
This is financial advice and I never give financial advice: DONT LEAVE DURING THE BEAR. If you don’t want to invest…learn. If you don’t want to learn…build. If you don’t want to build observe. DO SOMETHING…other than leave. There is so much opportunity here. Take advantage!
Very true, I started investing before the pandemic and that same year I pulled a profit of about $750k with no prior investing experience, basically all I was doing was seeking guidance from ROCHELLE DUNGCA-SCHREIBER who's a guru in the game, you can be passively involved with the aid of a professional.
I am curious as to whether individuals who underwent the 2008 financial crisis had a less arduous experience than I am currently enduring, given that prevailing market conditions are causing me considerable distress. Specifically, my portfolio has incurred a loss of over $27,000 this month alone, and my profits are dwindling. I am concerned that my retirement plans may be jeopardized, as I am unable to augment my stagnant reserves.
The pandemic has shown us just how quickly decades of planning, investing and saving can be completely upended. This could mean your current financial plan might leave you without enough money to last your retirement. A recent Vanguard study found that, on average, a hypothetical $500K investment would grow to over $3.4 million under the care of an advisor over 25 years, whereas the expected value from self-management would be $1.69 million, or 50% less.
What is the best strategy for an investor resident in the UK, and subject to UK tax laws etc. Should we buy something like a ftse all world index fund, or should we have more exposure to the US market.
Now watch all of the shills coming out of their holes to troll for suckers. If the posting mentions a name, don't be a fool; run away.
Invest, don't speculate. Index broadly, very cheaply, reinvest dividends when paid and walk away. NEVER SELL. It's really that simple. "Information" is useless. Timing is impossible. Add money regularly according to the calendar. Ignore the talking heads on TV, "advisors", etc. Check your accounts regularly once a year at tax time. That's all there is to it and it's what I did long ago. I was able to retire decades ago and my income increases continuously always remaining more than I can possibly spend. Time and the compounding of DIVIDENDS is the "certain" path to wealth.
$15,000 in 1976 is the equivalent of $76,890 in today’s dollar.
Jack Bogle could have lived and died a billionaire, but he chose to forgo personal wealth to help everyone. Bless him and Vanguard.
Inflation has torn into global markets, with investors ripping up their forecasts for further rises in interest rates and dumping bank stocks around the world. I'm at a crossroads deciding if to liquidate my dipping 200k stock portfolio, what’s the best way to take advantage of this bear market?
Knowing who is at the helm of the mutual fund is very important for one who knows the importance of keeping the good people in control of the money. The one controlling the money controls for example the best military! We know Van Guard most likely will be pro-liberty anti-nazis, pro-capitalism and anti-communist, and Pro-God when it comes down to core values!!!!
Thanks for this amazing information !! If you don't find a means of multiplying money, you will wake up one day to realize that the money you thought you had, has finished. Investment is key, I pray that anyone who reads this will be successful in life
I learnt most of these principles about seven years ago. A lot of people have been trapped strongly in the matrix– Go to school, get a job, and then slave your whole life. Many miss out on life-changing information that could have great effect on their finances. I played with the stock market sometime in 2020, and I was surprised at how well it turned out. I want to put in $90k more into the market. I heard people are making really great returns despite the downturn. Any recommendations?
Investing in the stock market has HISTORICALLY provided higher returns than other forms of investment. According to Morningstar, the average annual return for the S&P 500 index, which measures the performance of 500 large-cap stocks, was approximately 10% from 1926 to 2020. A trader made over $350k in this recession influenced market
Love these These pieces of advice, and it is practical. Unfortunately, most people who will watch this video will not really be able to apply the principles. We may not want to admit, but as Warren Buffett once said, investing is like any other profession– it requires a certain level of expertise. No surprise that some people are losing a lot of money in the bear market, while others are making hundreds of thousands in profit. I just don't know how they do it.
These are very valuable rules for anybody who wants to get rich. Unfortunately, most people who will watch this video will not really be able to apply the principles. We may not want to admit, but as Warren Buffett once said, investing is like any other profession– it requires a certain level of expertise. No surprise that some people are losing a lot of money in the bear market, while others are making hundreds of thousands in profit. I just don't know how they do it. I have about $89k now to put in the market.
I lost over $70K when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I find one source to recover my money, at least $9k profits weekly. Thanks so much Mrs Ann Elizabeth Messer.
Such a brilliant man, a legend, one statue is not enough or tall enough.
Thank you Mr Bogle. It is so wonderful to see a leader who puts human beings before making a dollar. Saint Peter will take care of you. Thanks for speaking the truth, that is so rare.
When a rich man, or woman :), is close to demise they always want to leave their legacy. But the truth is, those that are driven by profit have been lucky to be knowledgeable about stock market trading at the right time. Rest in peace JB.
Anyone who complains about every external factor preventing them from making a lot of money, politics, wall st, banks etc. Look no further than jack bogle. He’s laying it out calmly and articulately so anyone can understand “invest you must” and don’t worry about what you cannot control bc in the end if it goes to 0, well we all are going to 0. But if you can find the strength to keep learning and your emotions in check, you can become a millionaire for your family.
Wow, Jack seems very down to earth. Thank you sir for your huge contribution!
21:22 on risk
Investment in stocks is a great way to invest your money. The team is constantly checking the market for changes and make sure that you are always informed about the best time to invest. As a result, I have made more money than ever before, and I don't have to manage my portfolio on my own! Invest in stocks, it's worth it!
Thank you lord, for this man!