They have come to describe him as the “great democratizer of capitalism” for his staunch defense of passive management and cost reduction for investors.
Every great investor has his fan club, and John Bogle was not going to be less. The so-called Bogleheads, already a registered trademark, are a group of investors enthusiastic about the ideas and investment strategies of Jack Bogle, as the founder of The Vanguard Group, one of the largest investment fund managers in the world, was better known.
Their last meeting was in October 2018, when some 200 investors gathered in Pennsylvania alongside their teacher, “at a conference that’s a cross between a religious revival and an MBA finance class,” wrote Jason Zweig, a columnist for The Wall Street Journal. Just a few months later, in January 2019, Bogle passed away at the age of 89.
Precisely, after his death, Zweig praised him in this way: “History will remember Jack Bogle as the great democratizer of capitalism, the person who made it possible for almost everyone to afford to buy a share in stocks and bonds.”
This is a man whom Fortune named in 1999 “one of the four investment giants of the 20th century,” who founded Vanguard as a mutual fund company that would be owned by his shareholders, to whom he would return the funds’ profits. in the form of smaller commissions, the American magazine pointed out in a 2019 article.
Bogle popularized low-cost index funds—investment vehicles that track the behavior of an index, say the S&P 500—and, in the process, slashed spending for millions of ordinary investors.
“My ideas are very simple,” he told New York Times columnist Jeff Sommer in 2012. “In investing, you get what you don’t pay for. Costs matter. So smart investors will use low-low index funds. cost to build a diversified portfolio of stocks and bonds, and they’ll stay the course. And they won’t be fool enough to think they can systematically outsmart the market.”
According to Morningstar data from December 2008 collected by the Times, 19.8% of investment fund assets in the US were in index funds. Ten years later, it was 38.7%.
“If you invest in the stock market, you will grow with America,” Bogle said in 2018 on CNBC’s Power Lunch. Even when the situation is volatile, he advised, “stay the course; don’t let these changes in the market, even big ones … change your mind and never, ever, ever be in or out of the market. You must always be in to a certain level.”
For the founder of Vanguard, index funds provided the added security that investors need. “Owning a diversified portfolio of stocks and holding onto it for the long term is a winner’s game. Trying to beat the stock market is, in theory, a zero-sum game (for every winner, there must be a loser), and once deducted the significant investment costs, it becomes a losing game,” he told CNBC.
And he added: “Common sense tells us – and history confirms it – that the simplest and most efficient investment strategy is to buy and maintain all the listed companies in the country at very low cost.” How to do it? Through an index fund that replicates a reference index, according to Bogle.
The blog of the neobank MyInvestor published last year, based on the strategies of his teacher. Among them, they highlight that it is always a good time to invest; ignore thematic funds; save before investing and make investment decisions in a cold and rational way before investing, without being influenced by the behavior of the market. For Bogleheads, passive management is the best option.
In a self-signed article published by The Wall Street Journal two months before his death, Bogle wrote: “Clearly an indexing ban would not be a good idea.” However, he expressed concern that the percentage ownership of companies held by index funds would continue to grow over the next decade, with Vanguard, BlackRock and State Street concentrated. Bogle warned: “I don’t think such a concentration would serve the national interest.”
Bogle’s Strategies
costs matter
Use index funds to build a diversified portfolio of stocks and bonds with which to invest for the long term.
always inside
Stay the course despite crises and corrections and never change your mind. You always have to be in the market to a certain level.
beat the market
You can’t outsmart the market. Trying to beat him is a zero sum game.
Decide before you invest
In passive management, it is important to save before investing and to make investment decisions in a cold and rational way, without being carried away by emotions in the face of market changes.
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