American investor, founder and former CEO of The Vanguard Group, one of the world's largest investment companies.

John Clifton "Jack" Bogle and his twin brother David were born on May 8, 1929 in Verona, New Jersey, U.S. Just at this time, the family suffered greatly during the Great Depression; the boys' father lost his fortune and was forced to sell his house in a wealthy area of ​​the city. From the age of ten, the future financier earned his own pocket money by working part-time delivering newspapers and in a local cafe. Life's failures completely broke his father - he began to drink a lot and soon left his wife and children

cope with difficulties themselves. These same failures strengthened the character of little John and filled him with determination to restore his former prosperity, which he knew about only from the stories of his parents. In high school, John and his brother, having received a full scholarship from the firm of his uncle, his mother's brother, studied at the private boarding school Blair Academy. John then received a bachelor's degree from Princeton University, graduating in 1951, and attended classes at the University of Pennsylvania in the evenings and on weekends.

rsity of Pennsylvania). After graduation, Bogle joined the Wellington Management Company and worked under its founder, Walter L. Morgan.

After a successful rise through the ranks, John Bogle became chairman of the company's board of directors, but was later fired for the "grossly unwise" merger he had approved. Bogle himself considers this unfortunate decision his biggest mistake, but said that this unforgivable evidence of his immaturity was useful - in the end,

he learned a lot by example. In 1974, Bogle founded his own company, Vanguard, and under his leadership the company grew to become the world's second largest mutual fund management company. Influenced by American economists such as Eugene Fama, Burton Malkiel and Paul Samuelson, a year later Bogle did something revolutionary by introducing the world's first stock index fund, the Vanguard 500 Index. Fund".

A grateful alumnus, Bogle is a trustee.

Council at Blair Academy. He also serves on the advisory board of the Millstein Center for Corporate Governance and Performance at the Yale School of Management. In 2005, Bogle received an honorary Doctor of Laws degree from Princeton University. Despite the fact that in 1996, John Bogle underwent a serious heart transplant operation, he still takes an active part in the work of the Vanguard Group. John and his wife Eve Bogle have

have children and have had grandchildren for a long time. They live in Bryn Mawr, Pennsylvania. In 2004, Time magazine named Bogle one of the "100 Most Influential People in the World."

Bogle also currently serves on the Board of Trustees of the National Constitution Center in Philadelphia, a museum dedicated to the US Constitution. He previously served as Chairman of the Board of Trustees from 1999 to 2007 and was appointed Chairman Emeritus in January 2007, when he served as Chairman

It passed to former US President George H.W. Bush.

Taylor Larimore, Mel Lindauer, and Michael LeBoeuf wrote a book called "The Bogleheads" Guide to Investing based on John Bogle's strategy, which has proven to be a very useful guide. for the beginning investor. On the popular radio show "Moneytalk" station

ABC host Bob Brinker often talks about John Bogle's investment philosophy and recommends his books.

John Clifton Bogle (May 8, 1929) is an American entrepreneur, renowned investor, and founder and former CEO of The Vanguard Group, one of the largest mutual funds in the world. Author of the best-selling book “Mutual Funds from a Common Sense Point of View. New imperatives for the smart investor."

John Bogle and his twin brother David were born in Montclair, New Jersey, USA. The family suffered from the effects of the Great Depression. Bogle attended the private boarding school Blair Academy on a full scholarship, received a bachelor's degree from Princeton University in 1951, and attended evening and Sunday classes at the University of Pennsylvania. Bogle's graduate thesis, "The Economic Role of the Investment Company," in which he described the operating principles of the newly emerging mutual funds, influenced an entire industry by changing the approach to investing.

After graduation, John Bogle got a job at the Wellington Management Company, where he worked under the leadership of its founder Walter L. Morgan.

Having made a successful career with the company, in 1965, at age 35, John Bogle became its executive vice president, but in 1973, the profitability of the funds absorbed by Wellington with Bogle's approval fell sharply. As a result of the decline in stock prices, the company's total assets decreased from $2.6 billion to $2 billion. In January 1974, Bogle was fired.

In 1974, Bogle founded The Vanguard Group. Under his leadership, it became the second largest mutual fund in the world. In 1975, influenced by the work of Eugene Fama, Burton Malkiel, and Paul Samuelson, John Bogle founded the Vanguard 500 Index Fund as the first index mutual fund available to the general public. The fund's assets increased from $1.8 billion to $600 billion from 1975 to 2002, respectively.

John Bogle is a member of the board of trustees of the Blair Academy and a member of the advisory board of the Millstein Center for Corporate Governance and Performance, Yale School of Management.

Bogle is also a member of the board of trustees of the National Constitution Center in Philadelphia, a museum dedicated to the US Constitution. He was chairman of the board of directors of this fund from 1999 to 2007. In 2007, he lost this post to President George W. Bush.

Books (2)

The battle for the soul of capitalism

In this book, John C. Bogle, legendary investor and founder of the world's second-largest index mutual fund, Vanguard, offers a history of the transformation of American capitalism in recent decades. He shows how changes in the management structure of corporations resulted in their management ceasing to care about the interests of owners and beginning to pursue exclusively their own interests.

Going beyond simply criticizing the actions of CEOs, financial intermediaries, and lawyers, Bogle outlines important reforms that could lead to a revival of corporate responsibility.

Was born: Montclair, New Jersey in 1929

Companies:

Wellington Management Company

Vanguard Group, Inc.

Vanguard Group's Bogle Financial Markets Research Center.

The most famous facts:

In 1974, Bogle founded the Vanguard Group mutual fund and made it one of the world's largest and most respected fund sponsors. Bogle became a pioneer of mutual funds sold without a brokerage markup and a champion of low-cost index investing for millions of investors. He created and launched the first index fund, the Vanguard 500, in 1976. In 1999, Bogle was named by Fortune magazine as one of the four "investment giants" of the twentieth century.

short biography

Jack Bogle graduated with honors from Princeton University in 1951 with a degree in economics. During his university years, he studied mutual funds seriously, which served as the basis for his thesis and also laid the fundamental foundation for an index mutual fund.

He learned investing and management while working as a financial consultant for Wellington Management from 1951 to 1974, and founded Vanguard in 1974, becoming its CEO and chairman; He worked in this position until 1999, when he retired from the active affairs of the company. As president of Vanguard's Bogle Financial Markets Research Center, he continues to write and lecture on investing issues and is widely regarded as the "conscience" of the mutual fund industry.

In John Bogle and the Vanguard Experiment: The Man Who Transformed the Mutual Fund Industry (1996), biographer Robert Slater describes Bogle's life as "that of an evolutionary engine and an iconoclast, uncompromisingly committed to his founding principle of putting the investor's interests first, and constructively criticizing the fund industry for practices that are contrary to low-cost, customer-oriented mutual fund investing.

Investment style

In simple terms, Jack Bogle's investing philosophy advocates taking advantage of the market by investing in generic index mutual funds, characterized as being sold at no premium, low cost, low turnover, and passively managed. He consistently recommended that investors pay attention to the following:

Ease of investing is paramount

Minimizing costs and expenses related to investing

Productive economy in the perspective of long-term investments

Relying on rational analysis and avoiding emotions in investment decision-making

The versatility of index investing as a strategy suitable for individual investors

Leading stockbroker Jim Cramer paid the highest compliment to Bogle's investing style, going on record to say, "After being in stocks all my life, I have to admit that Bogle's argument for index funds makes me consider joining him rather than try." defeat him."

Publications:

- "Bogle on Mutual Funds" by John C. Bogle (1994)

- "Wise Mutual Fund Investing: New Imperatives for the Smart Investor" by John C. Bogle (1999)

- "John Bogle on Investing: The First 50 Years" by John C. Bogle (2000)

- "The Little Book of Smart Investing: The Only Way to Guarantee Your Share of the Market's Returns" by John C. Bogle (2007)

- “John Bogle and the Vanguard Experiment: The Man Who Transformed the Mutual Fund Industry” by Robert Slater (1996)

Bogle Quotes:

"Time is your friend; impulse is your enemy."

"If you can't imagine losing 20% ​​on the stock market, you shouldn't invest in stocks."

“When profitability is at its peak, risk is around the corner.”

John Bogle of Vanguard, one of the nation's largest mutual fund managers. He created the Vanguard 500 index fund, the first fund to abandon managers and tracks stock indices and, as a result, is a low cost and tax efficient investment for both institutions and individuals.

An outspoken critic of the mutual fund industry, Bogle has written several no-nonsense books on how to invest, including Common Sense on Mutual currency pair USD/CAD: New Imperatives for the Intelligent Investor (1999) (SS: Russian publication - “Mutual USD - CAD from a common sense point of view. New imperatives for the smart investor”, 2002, you don’t have to look for it in stores, it’s been out of stock for a long time) and “Bogle on Mutual US Dollar vs Canadian Dollar: New Perspectives for the Intelligent Investor" (1993) (Bogle about mutual USD / CAD: new prospects for an intelligent investor). His latest book, The Clash of the Cultures: Investment vs. Speculation" (Clash of Cultures: Against Speculation) was published in August. In this interview, Bogle shares his views on exchange-traded USD, fiduciary, indexation and investment standards - the Canadian money market.

Question: Speaking of speculation, is it true that the US-Canadian dollar exchanges have gotten out of hand?

Answer: No, that's not the point. What happens is typical when marketers start managing money instead of managers investments. You have market makers investing in high growth businesses. This is the way to get into the stock business. ETF (Exchange Traded currency pair USD/CAD, traded on the USD-CAD exchange) is the magic word of today, the greatest market innovation of the 21st century. But the data shows that ETF trading volumes are huge, huge amounts every day. Spider (SPDR 500 index, ticker: SPY) is the most traded stock.

This is absolute speculation and it hurts a lot of people. Vanguard ETFs have the same value as regular USD/CAD index funds, and they're cheaper than anything else. People say if you invest in ETFs index S&P 500 in ETF form and have no intention of ever trading it, how can you argue against that? But there is a temptation.

Question: How likely are you to trade ETFs?

Answer: Vanguard has done exhaustive research on the use of ETFs and has chosen to ignore this area. You are 25% more likely to trade ETFs. It's not as clear as day and night, but the trend exists. And this is Vanguard’s experience; in other companies, of course, everything is even worse.

Question: Do investment advisors trade as much as private investors?

What advisors have to do is react to events. Activity is what investors expect from them. I say buy and hold to some investment advisors. One once told me: “I tell my investors, “buy and hold,” and the same thing next year, they ask what to do, and I say do nothing, and the third year, so do I I say not to do anything. And he asks: “Every year, you tell me not to do anything. Why then do I need you, for what?” And I will answer them: “You need me to keep you from trying to do something.”

Question: You have long insisted that brokers work according to fiduciary management standards. Have you heard any convincing arguments against this?

A: I think at least the argument against this is that the brokerage industry thinks it's better to stick to the FINRA standard, which is the suitability standard. Broker from the brokerage firm must sell investments, and all he has to do is prove the appropriateness of the investment. But if your job is to manage money people, fiduciary duty (the agent’s duty to act honestly and competently in the interests of the customer) is obligatory, which is obvious.

Where it gets really interesting and challenging is at the intersection of life insurance and annuities. If you represent yourself as a seller, then this is a responsible position. In the ordinary life of an insurance agent, the only thing that matters is the validity and price insurance. But if you work for Met Life, you won't recommend Northwestern Mutual, which is one of the cheapest insurance options. And the question about price will never rise. I've been wondering a little about this: the magic of compound interest on income is being killed by the tyranny of compounding costs. costs(S.S.: Bogle means that expenses also obey the rule of complexity percent, growing exponentially)

Question: How do you deal with broad index funds that have different indexing approaches, such as those that give each stock a S&P 500 equal weight?

Answer: we do nothing. If you invest in Vanguard 500 index fund (VIFSX) or Vanguard Total SA Stock market fund (VTI), you are absolutely guaranteed to get a fair share of what . Equal weighted fund S&P 500 will it be better or worse, which is essentially a form of speculation. And USDCAD investing in commodities and currencies is just more speculation. Investment has a rate of return consisting of dividend yield and income growth. There is no rationale for commodities and currencies. This is pure speculation.

Question: Commodity ETFs are not subject to the Investment Company Act of 1940, which governs most mutual funds, and therefore do not have the same protections as most funds. Do you think investors understand this?

Answer: Less than 1% understand this. The same applies to those traded on stock exchange obligations, which are credit notes. Investors should invest, not speculate.

Q: What worries you most about the path forward?

Answer: The coming collapse of the locomotive of the financial system. A 401(k) plan, a savings plan, tries to be a retirement plan. It was never intended to be a pension. To be a pension plan you must invest money and not be able to remove them or borrow from it. And if you change jobs, you should be able to take it with you to your new job. The reality is that probably 70% of the citizens of this country will rely entirely on Social Security.

Question: How serious do you think Looney is? money market for the financial system as a whole?

Answer: It is difficult for me to speak for the entire economy as a whole. This is, of course, one of the main risks V industry mutual funds. It's a kind of razor's edge, and maybe you're walking along it, and people suddenly want them back at the old price. This is not just an empty phrase.

Question: The expectation that you can always get at least back for every investment dollar, is one of the main reasons why USD - CAD money market are attractive to investors. What happens if floating standards are established?

Answer: cost assets already floating, we're just hiding it. The security that people assume does not exist. I know that the transition to floating NAV (net value assets) will be painful for the money market, but it will not eliminate the market itself. This is absurd. I don't think enough people will step back and ask, "What's the reality?"

Question: industry is already tainted because money market funds are currently tiny, and as a result, investors are withdrawing money. Profitability investments until recently averaged 0.02% - $2 per year for every $10,000 of investment. Perhaps strict restrictions are only making the situation worse?

Answer: does not provide a competitive return on investment at the moment, but this will change over time. If net asset value floated, people would understand that asset values ​​only change very slightly. And if company manages the fund's money very conservatively, you can still maintain a stable asset value every day of the year.

But there is always a chance that something will go wrong in this technology-driven system. After what happened in 2008, we know that if something happens to the money market, it can lead to the spread of infection. Even if only one of the funds catches pneumonia, all the other funds will have to sneeze.

Investor Encyclopedia. 2013 .

John Bogle is known to anyone who is at all familiar with the idea of ​​a passive approach to investing. It was he who created the world's first index fund and management company, the leader of the investment industry Vanguard, and wrote several world-famous books about index investments. Even those who are far from passive investments listen to his opinion. In this regard, the principles that John Bogle adheres to in his personal investment portfolio are very interesting... Not everything that Bogle does is obvious. We publish the translation of the article Jack Bogle: Follow these 4 investing rules—ignore the rest (

Many people have asked John Bogle about his portfolio composition over the years, hoping to find out the ideal mix of assets. This question is especially relevant now in an unstable market, where international events have different effects on stock prices.

The founder of Vanguard Group, the world's largest mutual fund company, did use a simple portfolio in which he allocated assets using the 60-40 rule, with 60% US stock index fund and 40% US bond index fund. He maintained this distribution for himself for years.

Relatively recently, he changed his strategy, citing "numbers on his head": the portfolio is now 50-50, which makes his portfolio a little more conservative.

“I just like the idea of ​​anchoring while there’s no wind.” , said Bogle, who is 86 years old. “I don’t worry so much about the growth in the value of my assets anymore.” .

The most obvious and important point that Bogle offers is his advice to copy the entire market at once with an index strategy, rather than trying to beat it. Research confirms what seemed controversial in 1974, when Bogle founded Vanguard.

“If you look back and generalize, you can see that passive funds benefit from low annual fees.”, said John Rekenthaler, director of research at Morningstar. "This is exactly what Bogle promised."

The difference is not huge. In most categories, passively managed funds outperform by an average of 0.5% to 1% annually. But this difference is very clearly visible. For example, in the US there were 562 actively managed funds in the large-cap growth stock category and 25 passively managed funds. Over 10 years, passively managed funds posted an average annual return of 9.27%, compared with 8.05% for actively managed funds, according to Morningstar.

While index investing is now the norm, Bogle's other core principles of portfolio management remain controversial—and that's key to understanding how Bogle designs a personal portfolio that remains comfortable for him over the long term.

Here are four ideas that helped Bogle develop a suitable investment portfolio for himself, proving that there is more than one way to challenge the investment industry's suggestions.

1. Bogle doesn't rebalance. Even if necessary, once a year is enough.

Many investment advisors sell their services partly on the basis of rebalancing, or in other words, selling your “winners” (appreciating assets) to return your portfolio to its original asset allocation. Research shows that with regular rebalancing, you will reduce the risk of large losses in the short term. But, if you are investing for the long term, such actions may cause more problems than benefits. Every time you make a profit, you will most likely have to pay taxes, and you will certainly incur trading costs. Bogle doesn't do this for his portfolio.

“If you want to rebalance, once a year is probably enough.”, - he said.

2. Bogle does not invest abroad - at least not directly.

Bogle uses only US stock market assets in his portfolio. It's not because he prefers the US. He simply believes that it is better to bet on what you understand. Also, “we have better investor protection and legal institutions,” he said.

Many large US companies generate 50% or more of their income outside the United States, so buying a fund made up of US companies gives you de facto exposure to international markets. This will be international diversification. For example, New York-based Colgate-Palmolive generated only 18% of its net sales in the North American market in 2014.

But Bogle's advice contradicts conventional wisdom and even some. A 2014 Vanguard study found that investors should allocate at least 20% of their portfolio to non-U.S. stocks.

Tim McCarthy, former president of Charles Schwab and author of "The Safe Investor," agrees with Vanguard over Bogle in this case.

“No matter how big a country is, not investing outside of it is the wrong decision given the risk/return ratio,” McCarthy commented in the letter. “Having a small portion of international investments over decades will reduce your risk and increase your returns.”

3. For Bogle, diversification is bonds. And there is no need to have anything else.

If you have a great risk tolerance, you'll allocate 100% of your assets to a portfolio of stocks and keep it that way until you die, because historically that's the asset that has delivered the best returns over the long term. But such an all-stock portfolio would have been a disaster in 2007-09, Bogle notes in his book "Common Sense on Mutual Funds." Your portfolio would eventually recover, but what if you needed money during this time?

In his portfolio, Bogle uses bonds to reduce the risk of stocks. He feels comfortable with a simple portfolio, increasing the exposure to bonds as he ages because he wants to reduce the risk of a sudden and large drop in the portfolio's value.

But you can also use funds that represent other asset classes to reduce volatility, such as REITs (real estate trusts), international stocks and international bonds. This will add complexity to the portfolio, but research shows you can get some benefit in terms of risk reduction and possibly higher returns.

4. Bogle believes that if you have a “simple” portfolio, you will worry much less.

The genius of Bogle's portfolio is its simplicity. It is easy to follow, understand (its composition), and therefore simple to adhere to. You can try to increase your returns by adding diversification or rebalancing - just make sure you can stick to your strategy and aren't selling in panic or buying out of greed. The main point of your portfolio is to feel confident that it is the right choice for you in the long run.

A plan that includes low-cost, diversified investments must also take care of the other big risk in investing - emotional decision-making. For Bogle, being an investment master doesn't mean sticking to a perfect asset allocation. The main thing is to create a suitable portfolio according to your “feelings of correctness” and stick to the chosen strategy.