Legendary investor ‘Jack’ Bogle dies aged 89

John ‘Jack’ Bogle, who created the first index fund in 1975 and founded The Vanguard Group, bringing investing to the masses, has died at the age of 89.

Jack Bogle was a giant of the investing world who invented a low-cost way for individuals to invest; he made an impact on not only the entire investment industry, but more importantly, on the lives of countless individuals saving for their futures or their children’s futures.

In a statement, Vanguard CEO Tim Buckley said: ‘He was a tremendously intelligent, driven and talented visionary whose ideas completely changed the way we invest. We are honored to continue his legacy of giving every investor ‘a fair shake.’

Vanguard is now the largest investment firm in the world and index funds – trackers – account for trillions of dollars in assets.

‘index funds account for more than 70% of Vanguard’s nearly $5 trillion in assets’

One of the largest – the Vanguard 500 Index Fund – has more than $440 billion invested and, combined, the company’s index funds account for more than 70% of Vanguard’s nearly $5 trillion in assets.

Bogle’s steadfast commitment to the best interest of the investor was remembered by Morningstar’s director of personal finance, Christine Benz: ‘You were the conscience of the financial services industry and leave an awesome legacy of genuinely improving investors’ lives.’

Bogle’s interest in investing started young; as an economics major at Princeton, he wrote his senior thesis on mutual funds and graduated with honours. His work attracted the attention of Walter Morgan, a pillar of the mutual fund industry, who hired him in 1951 to work at his Wellington Fund.

After a management dispute in 1974 Bogle left and started Vanguard; in addition to his day job, he also served as chairman of the board of governors at the Investment Company Institute and chaired what became FINRA, which regulates broker-dealers.

After retiring from Vanguard in 1996, Bogle continued to write and speak on financial markets and investors up until his death.

In November, he sounded a warning, expressing concern that index funds may eventually own half of all US stocks. ‘I do not believe that such concentration would serve the national interest,’ he wrote in the Wall Street Journal.

He published 12 books. His latest, Stay the Course: The Story of Vanguard and the Index Revolution, came out just last month.

‘If I had a big liability in a year, I’d get prepared for it right now,’

In one of his last interviews Jack warned investors to prepare for 2019 by decreasing exposure to stocks and increasing investment in defensive strategies, such as fixed income securities like bonds.’Trees don’t grow to the sky, and I see clouds on the horizon. I don’t know if and when they’ll arrive. A little extra caution should be the watchword,’ Bogle said in an interview with Barrons, ‘If you were comfortable at a 70% to 30% [stocks to fixed income], under these circumstances you’d like to go back to 60% to 40%, or something like that.’

Bogle does not believe investors for the long term should try to pull completely out and time the market, which he says is ‘a really dumb strategy.’ Instead, he said it’s time ‘to really be thinking how much risk you want to have’ and make some defensive moves.

‘If I had a big liability in a year, I’d get prepared for it right now’ he said.

With his wife Eve Sherrerd, whom he married in 1956, Bogle had six children, 12 grandchildren and six great-grandchildren.