Jack Bogle died on Jan. 16. Bogle is not a household name, but anyone who has a 401k or IRA or investment portfolio owes him many thanks for the extra money in their accounts that will make their retirement happier and more financially secure.
Bogle blew up an entire financial industry that was preying on Americans who had little or no choice but to invest in and be overcharged by mutual funds, brokers and financial advisors.
He did it in two ways. First, he invented the index fund, which invested in the entire stock market or the S&P 500 or some other index. This was in contrast to fund managers picking and choosing stocks to try to beat the market.
Business and investment guru Warren Buffet, a huge fan of Bogle’s, once bet a hedge fund manager $1 million that an index fund would beat his hedge fund’s gains over a period of time. Buffet won and donated the prize to charity.
The other thing Jack Bogle did was to drastically lower the fees investors pay to mutual fund managers, for both index and traditional, actively managed funds. This resulted in more money for investors.
As Bogle’s company, Vanguard, took business away from other mutual fund companies and brokers, the industry was forced to lower costs. New companies sprung up imitating Bogle’s genius.
Vanguard is the leading fund manager in the world today with more than $5 trillion in its care.
Thank you Mr. Bogle for bringing ethics and fairness to the American people and an industry.
