John Bogle has always had a long-term plan. And this was the advice he gave to the current investor to manage his savings. The founder of the Vanguard Group allowed any American to participate in Wall Street, creating the first low-cost fund that replicated the performance of indices such as the S & P 500. The father of passive investment died on Wednesday at the age of 89 in Bryn. Mawr (Pennsylvania, United States East Coast).
Vanguard, which has its headquarters in the suburbs of Philadelphia, protects the money of millions of families who aspire to pay their children's school fees or to be able to retire with the peace of mind of not having to worry about money. Compete with the giant BlackRock for global supremacy in the management of indexed funds: the dominance of both companies in the ETF market – listed funds – is overwhelming.
Bogle created Vanguard in 1975 and did not take long to overcome his rival Fidelity. During the last decade it has had exceptional growth. His formula was to offer small savers access to the world of investment at an affordable price, applying fees for the management of their assets that were ridiculous compared to the large traditional companies of the American market.
Warren Buffett, an investor much more familiar to the public, has never hidden his admiration for John Bogle. "He did more for investors than anyone else," he said. Oracle of Omaha after having known his death. In fact, in the annual letters addressed to the shareholders of Berkshire Hathaway, it indicates that it is safer to invest in a hybrid fund that replicates the behavior of the highest global index or that buys shares in a basket of listed securities.
Vanguard, which is not listed, currently manages assets worth 5.1 trillion dollars, of which 440,000 million are under the umbrella of the fund indexed to the S & P 500. As Buffett says, with the its low-cost model has helped to save hundreds of billions of dollars for investors in commissions and at the same time get very high returns against actively managed funds.
The influence of the Vanguard group is such as to force the entire industry to turn to a more passive investment style, in order to attract more customers. John Bogle was the head of the company until 1996. It is estimated that he manages the assets of 20 million investors and offers his financial products in 170 countries. His personal fortune is estimated at 80 million.
The company is directed by Tim Buckley, who emphasized in the note announcing his death that he was an extremely intelligent person and "a visionary". Bogle considered himself very lucky, and not for the financial giant he had created: he suffered a first heart attack at the age of 31, followed by five others. He received a transplant with 65 years. And, despite everything, until a few weeks ago it was possible to see it on the financing television sets.
This legend in the finance world was born in Montclair (New Jersey, this) when it started hitting the Great Depression. His father ended up losing most of the family's assets. The financial problems and the uncertainty that he suffered caused a dent for the rest of his life. He had to learn, even without being very young, that it was better to roll up his sleeves: at the age of 10 he started to work distributing newspapers.
Bogle said his investment philosophy was common sense. These two words are in the title of two of the seven books he published while they were still alive. He also advised investors to be disciplined so that they can save money and not be carried away by the daily movements of the markets, even if they hate the current functioning of the financial system. "Because if you do not save, you can be sure that you will end up staying without anything," he said.