“Don’t look for the needle. Buy the haystack.” — John Bogle

John Bogle founded the Vanguard Group mutual fund company in 1974 and made it into one of the world\’s largest and most respected fund sponsors. Bogle pioneered the no-load mutual fund and championed low-cost index investing for millions of investors. He created and introduced the first index fund, Vanguard 500, in 1976.

John Bogle was born in Montclair, New Jersey, on May 8, 1929.

Jack Bogle graduated magna cum laude with a degree in economics from Princeton University in 1951. He studied mutual funds in depth during his university days, which culminated in his senior-year economics thesis and laid the conceptual groundwork for the index mutual fund.

He learned the investment management business by working for financial advisor Wellington Management from 1951 to 1974. He created Vanguard in 1974 and served as Chairman and Chief Executive Officer until 1996 and Senior Chairman until 2000.

Vanguard is the largest mutual fund organization in the world. Headquartered in Malvern, Pennsylvania, Vanguard comprises approximately 170 mutual funds with current assets totaling more than $2 trillion. Vanguard 500 Index Fund, the largest fund in the group, was founded by Mr. Bogle in 1975. It was the first index mutual fund.

John Bogle now resides in Bryn Mawr, Pennsylvania, with his wife, Eve. They are the parents of six children and the grandparents of twelve.

The story of his life and career is told in John Bogle and the Vanguard Experiment: One Man’s Quest to Transform the Mutual Fund Industry, by Robert Slater (1996) and The House That Jack Built, by Lewis Braham (2011).

John Bogle: Vanguard

From vanguard.com

In 1975, in the wake of one of the worst bear markets since the Great Depression, a visionary leader launched a bold experiment: a mutual fund company that wasn’t designed to earn profits for a management firm. Instead, Vanguard would be the first ever to be owned by its member funds and operated solely in the interests of its funds’ shareholders.

Founder John C. Bogle structured Vanguard for just one purpose—to build wealth for its clients…and only for its clients. The crucial difference from other fund companies: Vanguard would redirect net profits from economies of scale to fund shareholders in the form of lower costs. The arrangement was similar to that of a credit union or a traditional mutual insurance company. Sales commissions were eliminated, and operating expenses were kept low. And, soon after its founding, Vanguard opened the first index mutual fund, launching the era of low-cost index investing.

Vanguard’s innovations were revolutionary, but they were not an overnight success. Indeed, this new approach was often ignored or even scoffed at.

Steady growth

But as the 1970s turned into the 1980s, the news about Vanguard started to get around. It spread largely by word of mouth, as early clients told their families and friends about their experience—the prudently-managed funds, the conscientious service, the low costs. As assets rose, Vanguard reduced costs further and launched more funds, both indexed and actively managed. The company extended services to retirement plans, institutions, and financial advisors. Its loyal client base continued to grow, and Vanguard’s steady incoming cash flow and low redemption rate began to move it toward the ranks of the nation’s major fund firms. And as Vanguard grew, it was able to steadily lower its average fund expense ratio from 0.89% in 1975 to 0.38% by 1990 (and eventually to 0.19% by 2013).

Other investment companies started to take notice. By the 1990s, as low-cost investing and index funds demonstrated their merits, competitors began to emulate Vanguard by offering their own index funds.

Vanguard assets under management 1975-2013.  Assets surpassed 2.4 trillion in December 2013.

And as more investors and organizations realized the importance of cost efficiency, various fund companies selectively cut costs—sometimes just temporarily—in hopes of attracting new assets.

Meanwhile, under the leadership of Mr. Bogle’s successor, Chairman and CEO John J. Brennan, the company continued to expand, first venturing outside the United States in 1996 when it established offices in Melbourne, Australia. Vanguard later opened offices in a number of other international locations, including its European headquarters in London.

Today, Vanguard is one of the world’s largest and most trusted investment management companies, with operations around the globe. Our consistent, time-tested investment philosophy has proved itself in academic research and—most importantly—in helping millions of investors reach their goals. Vanguard has become widely recognized as a leading advocate of principled, common-sense investing.

Still standing alone

In a fiercely competitive investment arena, Vanguard remains alone in placing clients’ interests in the driver’s seat. Our corporate structure is still unique among mutual fund providers, with shareholders as the ultimate owners, receiving net profits in the form of lower costs.

As it continues to expand further into international markets, Vanguard offers an ever-wider range of investment products and services for individuals, institutions, and financial advisors, all at costs that are consistently among the lowest in the industry.

Vanguard’s dedicated crew is led by an experienced, stable management team. We’ve had just three CEOs in nearly four decades, with Chairman and CEO F. William McNabb leading the firm since 2008. Because Vanguard can’t be acquired by an outside entity, our clients can be confident that we will remain the same unique company, focused solely on their interests, in the years ahead.

John Bogle: Books

Mr. Bogle is a best-selling author and has published 10 books the latest of which, Clash of the Cultures: Investment vs. Speculation, was released in August of 2012.

Books authored:

  1. Bogle on Mutual Funds: New Perspectives for the Intelligent Investor (1993)
  2. Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor (1999)
  3. John Bogle on Investing: The First 50 Years (2000)
  4. Character Counts: The Creation and Building of The Vanguard Group (2002)
  5. Battle for the Soul of Capitalism (2005)
  6. The Little Book of Common Sense Investing (2007)
  7. Enough: True Measures of Money, Business, and Life (2008)
  8. Common Sense on Mutual Funds, Fully Updated 10th Anniversary Edition (2009)
  9. Don’t Count On It! Reflections on Investment Illusions, Capitalism, “Mutual” Funds, Indexing, Entrepreneurship, Idealism, and Heroes (2010)
  10. Clash of the Cultures: Investment vs. Speculation (2012).

John Bogle: Quotes

“The multiple failings of our flawed financial sector are jeopardizing, not only the retirement security of our nation’s savers but the economy in which our entire society participates.”

“Fund investors are confident that they can easily select superior fund managers. They are wrong.”

“The miracle of compounding returns is overwhelmed by the tyranny of compounding costs.”

“Don’t look for the needle. Buy the haystack.”

“As I have earlier noted, the most important things in life and in business can’t be measured. The trite bromide ‘If you can measure it, you can manage it’ has been a hindrance in the building a great real-world organization, just as it has been a hindrance in evaluating the real-world economy. It is character, not numbers, that make the world go ‘round. How can we possibly measure the qualities of human existence that give our lives and careers meaning? How about grace, kindness, and integrity? What value do we put on passion, devotion, and trust? How much do cheerfulness, the lilt of a human voice, and a touch of pride add to our lives? Tell me, please, if you can, how to value friendship, cooperation, dedication, and spirit. Categorically, the firm that ignores the intangible qualities that the human beings who are our colleagues bring to their careers will never build a great workforce or a great organization.”

“The mutual fund industry has been built, in a sense, on witchcraft.”

“The grim irony of investing, then, is that we investors as a group not only don’t get what we pay for, we get precisely what we don’t pay for. So if we pay for nothing, we get everything.”

“On balance, the financial system subracts value from society

“Over the short run, however, the fundamentals are often overwhelmed by the deafening noise of speculation—the price at which the stock market values each dollar of earnings.”

“The creation of Vanguard and its truly mutual (fund-shareholder-owned) structure has been the so-far-single counterexample to this pattern. I explain why this structure has worked so well, and why it must ultimately become the dominant structure in the industry.”

John Bogle: Articles

John Bogle: Videos

John Bogle: Newspaper cuttings