John Bogle on Investing: The First 50 Years

FOREWORD

FIDUCIARY RESPONSIBILITY, OBJECTIVITY OF ANALYSIS, AND WILLINGNESS TO TAKE A STAND

IF A MODERN DAY Rip van Winkle were to wake up after a sleep of 50 years, he'd have a lot of trouble understanding today's financial markets or recognizing the names of the major participants. But if Rip happened to be, say, a Princeton professor who had monitored or read John Bogle's senior thesis, he wouldn't be at all surprised about one of the most significant developments in the world of the stock market and money management.

John Bogle didn't invent the business of mutual investment funds. They had started before he went to college, but were barely visible. His curiosity about the business was piqued by an article in a magazine as he was ruminating about a thesis topic. That bit of serendipity led not only to an honors thesis but to a lifelong vocation.

Today, mutual funds are the dominant investment medium for American families. They directly own a large fraction of all traded stock and a sizable share of bonds and liquid assets as well.

The success of the industry is built on a solid base—the demonstrable value of diversifying risk and spreading costs by collective investment. Those were concepts intuitively recognized and emphasized by the Princeton senior.

John Bogle has not, of course, been alone in seeing the basic merit of mutual funds, now counted in the thousands. His great contribution—his single-minded mission—has been to insist that those funds should be managed, first ...