This week, the financial world was saddened to hear the news that legendary investor John Bogle had passed away. John Bogle was a revolutionary who introduced index-linked funds. He also founded the Vanguard fund- the world’s largest mutual fund organisation and wrote several books including “The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns”.
Despite his investment success, Bogle only amassed a smallish fortune in the low eight digit- due in part to his generous contributions to the community. His generosity and influence on the investing public earned him a spot in the 2004 Time list as “hero and Icon”.
As we mourn his passing, I want to share three quotes of his that will continue to inspire investors well into the future.
“Investing is not nearly as difficult as it looks. Successful investing involves doing a few things right and avoiding serious mistakes.”
John Bogle was an inspiration to investors, retail and professional alike. He believed that some mutual funds overcomplicated the process of investing, which resulted in poor returns.
By starting the Vanguard funds, which mirror indexes and charge low costs, he was able to outperform most mutual funds using a simple but effective strategy.
He believed retail investors could enjoy investing success by using a simple strategy and just avoiding major mistakes that can impact your returns.
He also famously said in one of his books, “When there are multiple solutions to a problem, choose the simplest one.”
“The two greatest enemies of the equity fund investor are expenses and emotion”
The two E’s- expenses and emotion are unavoidable parts of investing. However, investors should try to limit their impact on their returns. This applies to both fund investors and retail investors alike.
Two way that investors can reduce expenses and mistakes due to emotion is by reducing the number of trades that an investor makes and by using a long-term buy and hold strategy.
“The true investor… will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.”
Bogle said that in the short run, the fundamentals of a company are often overwhelmed by the deafening noise of speculation. Therefore, instead of focusing on the ticker price of a stock, investors should monitor the operating results of a company and its dividend returns.
By focusing on the fundamentals, rather than the stock price, the investor will be able to narrow in on what is really important to the long-term sustainability and success of an investment.
The Foolish bottom line
John Bogle was truly a revolutionary investor. His philosophies and teachings will continue to live on. In his last book, published in 2018, he cited a poem by Sir Harry Lauder, Keep Right on to the End of the Road. Here is an excerpt from the poem.
Though you’re tired and weary still journey on,
Till you come to your happy abode,
Where all the love you’ve been dreaming of
Will be there at the end of the road.
Rest in Peace Mr. Bogle.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.