“Don’t look for the needle in the haystack. Just buy the haystack.”
– Jack Bogle
The founder of Vanguard Funds and the father of indexing passed away last week at the age of 89.
Jack Bogle influenced modern investment strategy more than anyone in history. He single-handedly created the demand for low-cost index funds.
It was 1975 and the investment community universally believed in stock picking – buying low and selling high. Jack disagreed.
He was part of a small (and unpopular) pocket of investment professionals who believed paying high fees for a portfolio manager to pick “winners” is a loser’s game.
Instead, they believed in buying ALL the stocks and hitching your wagon to the forward progress of mankind in the form of corporate earnings.
So Jack created Vanguard Funds. His first index investment, aptly named – The First Index Investment Trust – tracked the S&P 500.
The investment community was unimpressed. And after a few slow years post-launch the fund was lovingly referred to as “Bogle’s folly”.
But Jack had the last laugh. Today Vanguard is the world’s largest mutual fund company with $4.5 trillion in assets (Fidelity is a distant 2nd with only $1.97 trillion).
Jack didn’t just create the world’s biggest fund company. He revolutionized the way we invest.
Ask any personal finance guru (myself included) and they will tell you to invest your serious money in low-cost index funds. Leave the stock picking for your gambling….err…play account. That wasn’t an option before Jack came along.
And he was selfless in his pursuit of helping us little people. He structured Vanguard as a mutual company meaning his customers owned the company, not faceless, absent shareholders. That allowed him to keep the fees low. But it also prevented him from making Zuckerberg/Gates/Bezos type wealth.
Our lives are either warnings or examples. And I’d say making real, positive changes for your fellow man at the expense of your own self-interest puts you in the “Examples Hall of Fame”.
Thanks, Jack. Rest in peace. Ya done good.
