Investors all around the world lost a friend and passionate advocate this month with the passing of John C. (Jack) Bogle.
The founder of Vanguard Group was a colossus both within and outside the investment industry. A strong believer in pooled investment vehicles like US mutual funds (managed funds to Australian investors), he was a strident and life-long critic of deceptive industry marketing practices and high costs.
It is impossible to overstate the legacy of Jack Bogle. His pioneering work – for which he was publicly derided as ‘un-American’ – has put billions of dollars back into the pockets of investors. Australian investors benefited directly when his long-time assistant Jeremy Duffield returned home to setup Vanguard Australia in 1996 – the first country outside the US to experience the ‘Vanguard effect’ as the group began to expand internationally. Bogle visited Australia in 1998 to speak at investor seminars in Melbourne and Sydney and explain the power of index investing as only he could.
It was a privilege at the time to share the stage with him – in my former guise as a financial journalist – because back then indexing was something of an oddity in the Australian market. The passion and compelling logic built on what he called “the relentless rules of humble arithmetic” left an indelible impression. As did his passion to give individual investors a “fair shake” by keeping fees at rock-bottom levels because “the miracle of compounding returns is overwhelmed by the tyranny of compounding costs”.
Over his 60-year career Bogle wrote 12 books – his last book Stay the Course: The story of Vanguard and the Index Revolution was published late last year. He also published numerous technical and opinion articles in the financial and mainstream media. Which is good news for investors both today and tomorrow who want to learn how to invest using fundamentally simple concepts like low costs and owning the whole market forever.
The Little Book of Common Sense Investing is a great distillation of everything Bogle held true, while for the more technically minded the longer form Common Sense on Mutual Funds will reward the time invested.
The genius of Jack Bogle was his unique ability to cut through the complexity – both real and artificial – that clouds the investment industry and focus on giving individual investors the best chance of success.
Robin Bowerman is Principal and Head of Corporate Affairs at Vanguard Australia, a sponsor of Cuffelinks.
For more articles and papers from Vanguard Investments Australia, please click here.