Vanguard’s Jack Bogle, Index Fund Pioneer, Dies Aged 89
Channel: Daily Insight
Date: 19/01/2019

The founder of The Vanguard Group, John Clifton "Jack" Bogle, died last week aged 89. He was a pioneer of the index fund which is something I use in my own investments. Although he wasn’t a big fan of ETFs, that is, Exchange Traded Funds, he said as long you treat ETFs as a long-term investment, and they are broad-based and not used for speculation, then they can be just as effective as any index fund.

Most of my personal money is tied up in Vanguard ETFs and I am using them just as Jack recommended. Vanguard ETFs are low-cost, broad-based, and great for long-term investors. Thanks to Jack’s pioneering mentality, the average person now has access to a plethora of simple, low-cost investment options.

His goal in life was not to become filthy rich, but to help others become richer as well. He proved that business leaders have the power to shrink the wealth divide. He used his leadership position at Vanguard to increase the wealth of millions of regular people.

Although we look at index funds as an obvious investment choice nowadays, it wasn’t always that way. Back in 1976, when Bogle launched the very first index fund, the industry ridiculed it. They labelled it “Bogle’s folly”. But he pressed on and now the index fund is pretty much part of every investor’s portfolio. Personally, I wouldn’t invest any other way in the stock market. Investing in individual stocks is risky and most people fail. So why bother? Why not just invest in a broad-market index fund or ETF and let the market do the work? That was Jack’s idea and it was revolutionary. Trying to pick stocks and time the market is a sure way to lose lots of money. Even the best investors often get it wrong.

To all my listeners, I would recommend following Jack’s advice. Invest in index funds, not just from your home country, but from around the world. As you’ve probably seen in my other videos, I invest in Asia, Australia, Europe, and the United States. Why invest in a single company when you can invest in the world’s best 1000 companies, all just by putting your money in one or two index funds or ETFs? The choice is obvious in my opinion.

So I’d like to finish with some of my favourite Jack Bogle quotes.

“The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently.”

“The index fund is a sensible, serviceable method for obtaining the market's rate of return with absolutely no effort and minimal expense. Index funds eliminate the risks of individual stocks, market sectors and manager selection, leaving only stock market risk.”

“Beating the market is a zero-sum game for investors. Money managers, as a group, must provide the market return... But that return comes only before their exorbitant fees, operating expenses, and portfolio turnover costs are deducted. The zero-sum game before costs becomes a loser’s game after costs.”

“Don't look for the needle in the haystack. Just buy the haystack!”

“If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks.”

“The grim irony of investing is that we investors as a group not only don't get what we pay for, we get precisely what we don't pay for.”

“The miracle of compounding returns is overwhelmed by the tyranny of compounding costs.”

“Investing is not nearly as difficult as it looks. Successful investing involves doing a few things right and avoiding serious mistakes.”

And finally,

“Time is your friend; impulse is your enemy.”

Thanks Jack for all your wonderful contributions. You have provided a great service to this world. As he wrote in his memoirs,

“I’ve usually used the phrase ‘stay the course’ as one of the great rules of investment success, but as I complete this memoir, ‘stay the course’ is also a splendid rule for fighting our way through the inevitable ups and downs of the short spans of our existence on this Earth, and for enjoying a productive and honourable life well lived.”

Thank you Jack. Rest in peace.

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IMAGE
John Bogle
By The Institute for Fiduciary Standard [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0/)], via Wikimedia Commons

SOURCES
He should be a billionaire, but Jack Bogle chose to make others richer
https://www.smh.com.au/business/markets/he-should-be-a-billionaire-but-jack-bogle-chose-to-make-others-richer-20190119-p50sd8.html
Jack Bogle changed investing forever with index funds, but wasn’t always happy about it
https://www.cnbc.com/2019/01/16/bogle-changed-investing-with-index-funds-but-wasnt-always-happy-about-it.html

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