John C. Bogle

Lore & Background

John Bogle was born on May 8, 1929, in Montclair, New Jersey, to William Yates Bogle, Jr. and Josephine Lorraine Hipkins. His Scottish-American family lost its wealth during the Great Depression, and his father's alcoholism led to his parents' divorce. Bogle and his twin brother David attended Manasquan High School and later transferred to Blair Academy on work scholarships, where Bogle showed aptitude for mathematics. He graduated cum laude from Blair in 1947 and studied economics and investment at Princeton University, writing his thesis on 'The Economic Role of the Investment Company.' After graduating magna cum laude in 1951, he was hired by Walter L. Morgan at the Wellington Fund, reportedly because Morgan read his thesis.

At Wellington, Bogle rose to become chairman of its mutual funds in 1970 but was later fired for approving an 'extremely unwise' merger, which he called his biggest career mistake. In 1974, he founded The Vanguard Group. In 1976, he introduced the first index mutual fund, derided as 'Bogle's Folly.' Influenced by Paul Samuelson, he created the First Index Investment Trust (precursor to the Vanguard 500 Index Fund), designed to mimic the S&P 500. Bogle suffered heart issues in the 1990s, relinquished his CEO role in 1996, and had a successful heart transplant that year at age 67. He left Vanguard in 1999 and moved to the Bogle Financial Markets Research Center.

Reader's Guide

John Bogle's significance lies in his role as the founder of The Vanguard Group and his popularization of the index fund, which transformed investing for the general public. His 1999 book 'Common Sense on Mutual Funds' became a bestseller and a classic. Bogle preached investment over speculation, long-term patience, and reducing broker fees. He argued that a low-cost index fund representing the entire US market, held over a lifetime with dividends reinvested, was an ideal vehicle. His philosophy distinguished investment (long-term, lower risk of capital destruction) from speculation (short-term, potentially destructive risk). Bogle sold most of his stocks during the late 1990s dot-com bubble, correctly anticipating poor stock returns and superior bond results over the next decade. His ideas are the founding principle of the 'Bogleheads' forum, supported by the John C. Bogle Center for Financial Literacy. Fortune magazine named him 'one of the four investment giants of the twentieth century' in 1999, and Paul Samuelson ranked Bogle's invention of the index fund alongside the wheel, alphabet, and Gutenberg printing.

Did You Know?

• Bogle was the great grandson of Philander Banister Armstrong, who founded the Phoenix Mutual Fire Insurance Company and attempted to reform the fire and life insurance industries.
• Bogle's first index mutual fund, introduced in 1976, was derided by critics as 'Bogle's Folly' and called un-American for its passive approach.
• Bogle had a successful heart transplant in 1996 at age 67, after being considered past the age for a healthy heart transplant.
• In a 2005 speech, economist Paul Samuelson ranked Bogle's index fund invention along with the wheel, alphabet, and Gutenberg printing.