Life Changing Advice

Investing

One of the most important financial innovators of the 20th century, Bogle is the founder of the Vanguard Investment Group, one of the largest mutual fund companies in the United States, and father of the index fund concept.

In 1976, one year after founding Vanguard, Bogle started a mutual fund based on the idea that investors were better off trying to match, rather than beat, the market. Index investing is based on the idea that over the long-term, the great majority of investors are better off investing in a fund which buys stocks and bonds representing all or part of a market, rather than trying to pick some investments that will outperform the market. Bogle makes a convincing argument that, especially given the costs involved, there is little chance for most investors to do better than the market as a whole. Index funds thus focus on keeping expenses very low and trying to mimic the performance of the markets. His first index fund started with $11 million; by 1999 Vanguard's largest index fund had $74 billion in assets, and the index fund industry that he started had $244 billion in assets. Born in New Jersey at the peak of the stock mania that burst in the depression, Bogle was interested in mutual funds from the very start of his career; his senior thesis at Princeton was on the mutual fund industry. Immediately after graduating, Summa cum Laude, from Princeton in 1951, he entered the mutual fund industry. At age 49 he began Vanguard, and continued to be involved in its management for the next 25 years. In 1999 he was pressured to retire from the company he founded. He continues to study markets and crusade for index investing and lower fees as president of the Bogle Financial Markets Research Center.

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