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John Bogle dies

The investment world recently lost John Bogle.  Many of you will look at me with wild eyes asking who on earth John Bogle was.  He was a man that pioneered cost-effective investment into unit trusts as they are known in South Africa or ETF’s as they are known elsewhere.  His company, Vanguard, became the number one ETF firm in America and sparked off imitation companies such as SATRIX in South Africa.  They basically do low cost investing in the Stock Exchange generally just mimicking the entire index.  In other words, if the market goes up as a whole, your shares go up as a whole and if the market goes down they go down. 

The biggest problem is that over the last 30 or 40 years, even longer, there are very few professionals, although they always say they can beat the market, who actually consistently beat the market.  With an index fund at a cost of 0,2% a year, a professional at a cost of about 2% a year, is a lot more expensive if they don’t beat the index fund (which they usually don’t).  In other words, “professional investment experts” charge almost 10 times more, even if 0,2% to 2% does not seem like very much more, and in return for that they often don’t even match the index and often do worse than it.  There will come a time when they will probably start doing better than the index – when that is, I don’t know, other than to say that every year they announce that this is the year for active investment compared to the passive investment of just buying an index, and so far, on the whole and for most of them,  they have not been right.  Warren Buffett also had a bet with a famous manager a few years ago where the investor pretty much guaranteed he could beat the index over a 5 or 10 year period and ultimately failed miserably in his bet with Warren Buffett.

Posted by Michael de Broglio on Tuesday 05-Feb-19 Share on Facebook   Tweet It

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Jadine E  said:
on Tuesday 05-Mar-19 02:08 PM
What a great legend and more forms part of so much history.

Prishani  said:
on Tuesday 05-Mar-19 01:47 PM
What a great legacy to leave behind, I am sure many people in the finance industry would be grateful for the contributions he made and the doors he has opened with his ideas!

Helen  said:
on Monday 04-Mar-19 01:26 PM
Bogle's innovative idea was creating the world's first index mutual fund in 1975. Bogle's idea was that instead of beating the index and charging high costs, the index fund would mimic the index performance over the long run—thus achieving higher returns with lower costs than the costs associated with actively managed funds.

Sinead  said:
on Friday 01-Mar-19 04:03 PM
I too am one of those people that wouldn't have known who John Bogle was. Brilliant field to be involved in. Sad to have lost someone of his expertise. May his soul Rest in Peace.

Zindy  said:
on Friday 01-Mar-19 08:19 AM
I have never heard of him but since reading the blog did some research. For a man whose family’s struggled during the Great Depression and he has always struggled with health issues and never let that get him down he built quiet a reputation for himself . May his soul rest in peace.

Daniella  said:
on Wednesday 20-Feb-19 03:16 PM
The knowledge on how to invest and what to invest in is truly amazing- When it comes to investments I sort of just avoid the whole thing because my luck i will lose money therefore I have never heard of John Bogle. May he rest in peace

Natasha  said:
on Wednesday 20-Feb-19 11:20 AM
I have never heard of this man before,sounds like he was a very good investor, May he R.I.P

Ashleigh  said:
on Monday 18-Feb-19 03:35 PM
I knew nothing about him until now. He at least lived a great life it seems. May he rest in peace.

Megan  said:
on Thursday 14-Feb-19 12:46 PM
I've indeed never heard of John Bogle, sad though. He made such a great impact pioneering seemingly reasonable shares for anyone to invest, as you've said "low cost".

Michelle D  said:
on Thursday 14-Feb-19 08:37 AM
I have a unit trust with FNB and I was a little bit shocked. I started it under the advice that unit trusts are very low risk but also yield low reward so they are safe but you're not going to make millions off of them. To my dismay I have done nothing but lose money off my unit trust. I realise the value of someone who knows how to invest.

Fikile  said:
on Tuesday 12-Feb-19 03:34 PM
He sure did have a good mind when it comes to investments, i hope that he did share his intelligence with other people, may his soul rest in peace.

Mathilda Du Preez  said:
on Monday 11-Feb-19 12:14 PM
Never heard of John Bogle but seems that he was a very knowledgeable man in the field of investing.
Hopefully he shared his expertise with someone in his field of work to take over.

Bianca T  said:
on Friday 08-Feb-19 01:36 PM
Never heard of him, may he rest in peace

Victoria  said:
on Friday 08-Feb-19 08:36 AM
I had no idea who John Bogle was until reading this, seems like the investment world has lost one special man.

Bianca N  said:
on Thursday 07-Feb-19 09:40 AM
I had no idea who he was until now. Still sad to hear of someone who has pioneered something this great that has passed. R.I.P

Angelique Jurgens  said:
on Wednesday 06-Feb-19 04:17 PM
I have certainly never heard his name before now. May he R.I.P

courtney  said:
on Wednesday 06-Feb-19 04:08 PM
Don't know this man at all but it was a very interesting read though.
Big thank you to him for making it easier for us to invest.

Michelle Smillie  said:
on Wednesday 06-Feb-19 02:59 PM
Unfortunately there will always be experts in a field whose loss is great. All we can do is trust that he mentored someone who can take over.

Alexis  said:
on Wednesday 06-Feb-19 01:56 PM
I was one of those wide eyed people...I have had a unit trust or two in my life as I am not very clued up in investing myself and it seems to be the easiest. To be honest, kudos to him for making it a bit easier for us plebs who know nothing about investing

Zandelee  said:
on Wednesday 06-Feb-19 01:55 PM
This was very interesting to read. The other day I saw a graph of how Warren Buffets income has grown over the years and this was very inspirational.

Joyce  said:
on Tuesday 05-Feb-19 05:00 PM
It sounds like John Gible knew this kind of business very well.

brumilde  said:
on Tuesday 05-Feb-19 02:55 PM
You are right, never heard of the person, allot goes on in the world that one is never aware of, who helped developed what, who created what, we take allot of things for granted and just assume that things have always been a certain way.

Lucretia  said:
on Tuesday 05-Feb-19 08:48 AM
The man had a good innings, to live to the age he did. Let us hope he passed his vast knowledge of the game onto others to follow in his footsteps.

Angelica Canosa  said:
on Tuesday 05-Feb-19 08:04 AM
This gentleman was an entrepreneur and had vision. I do not know much about investing but believe it is important to be clued up; in order to grow your personal wealth. I am going to read up on this...Thanks for the article


Johannesburg based attorney specializing in personal injury matters including Road Accident Fund claims and medical negligence matters. My interests include golf, reading and the internet and the way it is constantly developing. I have a passion for life and a desire for less stress!
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