Founder and former CEO of the Vanguard Mutual Fund Group John C. Bogle gave a lecture Friday at Duke University on how investors can get the most out of the market. His advice is simple. Buy and hold: use low-cost index funds to hold the stock market, and hold it “forever.”
“That’s been part of my crusade,” he said. “To try to persuade people about the simplicity of using indexing … That’s the winning strategy.”
Bogle discouraged falling for the allure and excitement of exchange-traded funds (ETFs), which are higher cost and actively managed. They are traded back and forth throughout the day, creating a community of sales-active management. “It’s easy to find (ETFs) that beat the market looking back, but the reality of this business is that task performance is a terrible – let me repeat that – a terrible way to look at future performance."
The lecture, which catered primarily to students from Professor Edward Tower’s ECON 581 Investment Strategies course, was delivered via videoconference and open to the public. Nearly 50 people were in attendance, including members of the broader Duke community as well as several Durham-based “Bogleheads,” investing enthusiasts who adhere to the octogenarian’s investing philosophies.
Bogle, who is known to some as “St. Jack,” is highly regarded as the creator of first index mutual fund. He started Vanguard in 1975 with the idea that it would be a company owned by its shareholders, therefore prioritizing shareholders’ profits. That platform has resulted in incredible growth: The company now manages $5 trillion in assets worldwide.
“The ‘St. Jack’ nickname is truly justified because Jack Bogle has really reformed our financial system by creating low-cost index mutual funds, facilitating the ability to make a decent return on (clients’) money, and channeling the funds into productive uses in our economy,” Tower said.
The 10th anniversary edition of Bogle’s “Little Book of Common Sense Investing” is currently available.
Economics Department
