Heeding the investment wisdom of Jack Bogle starts by keeping it simple

Bob Pisani’s book “Shut Up & Keep Talking”


(Below is an excerpt from Bob Pisani’s new book “Shut Up & Keep Talking: Lessons on Life and Investing from the Floor of the New York Stock Exchange.”)

In 1997, just as I was becoming on-air stocks editor for CNBC, I had a telephone conversation with Jack Bogle, the founder of Vanguard.

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That conversation would end up changing my life. 

Jack was by then already an investing legend. He had founded Vanguard more than 20 years before and had created the first indexed mutual fund in 1976. 

CNBC had been in the regular habit of having investing “superstars” like Bill Miller from Legg Mason, Bill Gross from Pimco or Jim Rogers on the air. It made sense: let the people who had been successful share their tips with the rest of us. 

Bogle, in our brief conversation, reminded me that these superstar investors were very rare creatures, and that most people never outperformed their benchmarks. He said we were spending too much time building up these superstars and not enough time emphasizing long-term buy-and-hold, and the power of owning index funds. He reiterated that most actively managed funds charged fees that were too high and that any outperformance they might generate was usually destroyed by the high fees. 

His tone was cordial, but not overly warm. Regardless: I started paying much more attention to Bogle’s investment precepts. 

The birth of Vanguard

From the day it opened on May 1, 1975, Vanguard Group was modeled differently from other fund families. It was organized as a mutual company owned by the funds it managed; in other words, the company was and is owned by its customers.

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