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Words of Wisdom from the Master--John Bogle

Updated on August 12, 2012
John Bogle
John Bogle

John C. Bogle Inventor of Index Mutual Funds

John Bogle's senior thesis at Princeton University in 1951 was the basis for his invention of the no-load, low cost, tax-efficient index mutual fund which has become the gold standard for investing by ordinary investors in this country. At age 83, after six heart attacks and a heart transplant, Bogle recently published his 11th book on investing, The Clash of the Cultures: Investment vs. Speculation. Bogle is the founder and retired chairman of the Vanguard Group. Here are some of his sayings:

"The economy has clouds hanging over it...and the financial system has been damaged. The risk of a black-swan event--or something unlikely but apocalyptic--is small, but it's real."

"Wise investors won't try to outsmart the market...They'll buy index funds for the long term, and they'll diversify."

"...the outlook for bonds over the next decade is really terrible."

Dark as this outlook may be, he says, people need to "stay the course" if they are to have hope of buying homes or putting children through college or retiring in comfort.

"My ideas are very simple...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."

"We've really got no choice. We've got to fix this system. All of us, as individuals, need to do it... A culture of short-term speculation has run rampant...superseding the culture of long-term investment that was dominant earlier in the post World War II era." [Bogle supports the Volcker Rule and several reforms in 401k plans and other financial reforms.]

Bogle has not been a supporter of Vanguard's decision to offer ETFs because they encourage the propensity to trade rapidly, " speculate rather than invest."

Other quotations from his books and speeches include

"Like a rock."

"Even one person can make a difference."

"Press on, regardless."

"We lead."

"Success must not be bought but earned." and "Stay the course." both of which are exemplified by John Bogles long career.

[I am indebted to the NY Times article by Jeff Somer linked below as well as several other sources about John Bogle.]


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    • Ralph Deeds profile image

      Ralph Deeds 3 years ago from Birmingham, Michigan

      "Have I misinterpreted what I am observing from Wall Street?"

      Nope. But if you have a long time horizon you can do pretty well following Bogle's advice. Save regularly and settle for market returns with two or three no-load, low-cost, tax-efficient mutual funds.

      Thanks for your comments Messrs. Schneider and Micchaelia.

    • jmicchael1a profile image

      jmicchael1a 5 years ago from Springfield Illinois

      I have a mild to passing interest in the FOREX market. I suspect that Mr. Bogle would have a dim view of FOREX. It is a huge market. But there is potential for rapid volatility because currencies are very liquid. I must say that is why I enjoy trading even though it is only a demo account.

      I share this because it doesn't seem that the

      investment model of Mr. Bogle is safe either. Speculation is becoming the norm instead of the exception.

      Have I misinterpreted what I am observing from Wall Street?

    • profile image

      Howard Schneider 5 years ago from Parsippany, New Jersey

      Excellent Hub, Ralph. I wish we had many more John Bogles in the financial markets. He has always been a wise man. Unfortunately Wall Street is crowded with get rich quick charlatans. I should know, I worked there in the back offices for 27 years. Too many Trickie Dickies and not enough Bogles.

    • Wizard Of Whimsy profile image

      Wizard Of Whimsy 5 years ago from The Sapphire City

      A great example of how a sage and true businessman should behave and, unlike some present Wisconsin politicians, William Proxmire comes to mind as to how a sage and true statesmen should behave.

      Thanks Ralph, as always your taste is impeccable!