Review of John Bogle On Investing : Industry Legend Speaks
Ram Bhimani 23 January 2016

Insights into guiding principles of a true pioneer in index funds

 
John Bogle is an institution in the US financial market. He is a true pioneer, having created index funds (under the Vanguard label) and having led a lifelong battle for the small investor by advocating low-cost funds. He has also been a powerful writer; his books are now being re-issued as investment classics. John Bogle on Investing: The First 50 Years offers insights into his guiding principles. It consists of the most important essays organised into five sections.
 
The first deals with investment strategies for the intelligent investor, emphasising simplicity in investing. It argues that experts like fund managers, investment newsletters, etc, have not been able to beat the benchmark index returns. He, thus, builds the case for investing in index funds. The section explains that risk keeps on moderating as the time horizon for investing increases, while time magnifies the impact of costs. 
 
The second part deals with the past trends and future prospects of the mutual fund industry, emphasising the importance of keeping fund costs down. It moves on to corporate governance issues and explains the role of mutual funds on corporate governance of companies they invest in. The book also deals with the evolution of Vanguard mutual fund and the challenges faced by Bogle in creating it. It ends with the ‘economic role of investment company’, a lofty idea that will put many in mutual fund industry to shame.
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