RIP, Jack Bogle

Jack Bogle, founder of Vanguard and inventor of the index fund, died this month. The “patron saint of the small investor,” Bogle’s strategies and advice saved many a middle-class owner of an IRA or non-deferred savings fund a bundle of money, by suggesting that paying hefty fees for often ineffective mutual fund and stock portfolio managers is unnecessary. By tracking the stock market, an index fund earns the average stock market return, performance that beats that of most professionals — at a fraction of the cost.

You can’t beat common sense. And Bogle was the avatar of common sense. His eight rules for small investors:

1. Select low-cost funds
2. Consider carefully the added costs of advice
3. Do not overrate past fund performance
4. Use past performance to determine consistency and risk
5. Beware of stars (as in, star mutual fund managers)
6. Beware of asset size
7. Don’t own too many funds
8. Buy your fund portfolio – and hold it

Works for me…