John C. Bogle

John C. Bogle was an American investor who founded the Vanguard Group and made low-cost index mutual funds widely available to individual investors.

Vanguard Group: An investment company founded by John C. Bogle that is owned by its funds and their shareholders. Bogle built Vanguard around a mutual ownership structure that aligned the company with fund investors.
Passive management: An investment approach that follows a preset portfolio strategy instead of selecting securities to outperform a benchmark. Bogle’s index funds used passive management to avoid costly stock-picking.
Wellington Management Company: An investment management firm founded in Philadelphia in 1928. Bogle became president of Wellington Management before founding Vanguard.
Active management: An investment approach that selects securities or market timing decisions to outperform a benchmark. Bogle argued that active funds’ costs and trading made sustained outperformance difficult for investors.
Vanguard 500 Index Fund: A mutual fund launched by Vanguard in 1976 to track the S&P 500. Bogle’s first index fund brought broad U.S. stock-market exposure to individual investors.
Diversification: The practice of spreading investments across assets to reduce exposure to any one risk. Broad index funds diversify across many companies through a single investment.
S&P 500: A stock-market index tracking 500 leading publicly traded U.S. companies. Bogle chose the S&P 500 as the benchmark for Vanguard’s first index mutual fund.
Market timing: An investment strategy that shifts holdings based on forecasts of future market movements. Bogle favored staying invested over trying to predict short-term market direction.
Index fund: A fund designed to track the performance of a market index. Bogle turned index investing into a practical, low-cost choice for retail investors.
Compounding: The process by which investment gains generate further gains over time. Bogle emphasized that keeping more returns invested lets compounding work for shareholders.

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