Commentary

Vanguard Founder John Bogle, Who Revolutionized Investing, Dead At 89

John Bogle, founder of The Vanguard Group and progenitor of the low-fee, less-risk index funds that bought Wall St. to Main St., died yesterday of esophageal cancer at his home in Bryn Mawr, Pa. He was 89. 

“Often dubbed the ‘father of index investing,’ Bogle -- a champion of the individual investor -- was the driving force behind the shift away from a beat-the-market mentality and high-cost funds run by stock pickers that have reshaped the industry. More than 40 years after its birth, the index fund has led to today’s preference for so-called ‘passive’ investing, a strategy that enables investors to buy a diversified basket of stocks with low expenses with a goal of matching the returns of a broad market index like the Standard & Poor's 500,” explains Adam Shell for USA Today.

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“In an industry normally associated with taking people’s money, Bogle offered a rare thing in finance -- a genuinely good deal," writes Allison Schrager for Quartz.

“Ever since he was a college student at Princeton, Bogle believed most mutual funds did not actually perform any better than a market index, a fund where stocks are held in proportion to their size in the stock market. With index funds, there is no magic formula, and no need to pay anyone extra for their special stock-picking ability. When Bogle launched Vanguard he was the first to offer index funds to individual investors, at rock-bottom prices. Wells Fargo already offered index funds, but only to institutional investors,” Schrager continues.

“‘My ideas are very simple,’ he told the financial columnist Jeff Sommer of the New York Times in 2012. ‘In investing, you get what you don’t pay for. Costs matter. So intelligent investors will use low-cost index funds to build a diversified portfolio of stocks and bonds, and they will stay the course. And they won’t be foolish enough to think that they can consistently outsmart the market,’” reports the NYT’s Edward Wyatt.  

“On Twitter, many investors and Wall Street observers remembered Bogle fondly not only as someone who changed retirement savings but who also steered his legendary career more by a humanitarian spirit than a desire for profit,” observes Kevin Kelleher for Fortune.

For example, Morgan Housel of the Collaborative Fund tweeted: “John Bogle built a nonprofit business with $5 trillion under management. What would have been profit effectively went to retirees. He’s the biggest undercover philanthropist of all time.”

Housel links to in Art Carey’s and Erin Arvedlund’s obit on Philly.com, which reveals Bogle as “a chipper and unpretentious man who invited everyone to call him ‘Jack.’”  They continue: “His innovations, reviled and ridiculed at first, enabled millions of ordinary Americans to build wealth to buy a home, pay for college, and retire comfortably.”

Vanguard, which is based in Valley Forge, Penn., currently manages assets for more than 20 million investors in about 170 countries.

“John Clifton Bogle was born in May 1929 in Montclair, N.J., to a well-off family; his grandfather founded a brick company and was co-founder of the American Can Co. in which his father worked,” according to the Associated Press.

But, as Avie Schneider recounts for NPR’s “All Things Considered,” Bogle’s “family lost everything they had in the Great Depression, ‘so I grew up having to earn what I got, help out with family expenses,’ Bogle told NPR several years ago. ‘I started working when I was 9 years old.’”

He graduated from Princeton with a degree in economics in 1951 and was Vanguard’s chairman and CEO from its founding in 1975 until 1996.

“He stepped down as senior chairman in 2000, but remained a critic of the fund industry and Wall Street, writing books, delivering speeches and running the Bogle Financial Markets Research Center,” the AP obit adds. He is survived by his wife, Eve, six children, 12 grandchildren and six great-grandchildren. 

“Bogle, whose personal fortune was valued at a relatively modest $80 million, had a history of cardiac problems, suffering the first of a half-dozen heart attacks at age 31 and undergoing a transplant at 65,” CNBC’s Marty Steinberg reports. 

“He wrote 13 books on investing, most recently the 2018 'Stay the Course: The Story of Vanguard and the Index Revolution.' His devotees created an entire website based on his investing advice: bogleheads.org,” Steinberg adds.

Jason Zweig’s and Sarah Krouse’s pithy lede for the Wall Street Journal aptly sums up Bogle’s impact on the financial world: “American investors have lost the fiercest advocate they may have ever had.”

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