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Regier Carr & Monroe, LLP, CPAs


4801 East Broadway Blvd, Suite 501, Tucson, AZ 85711

Phone: 520-624-8229


May 2019

Advice from the Master

Legendary mutual fund pioneer John Bogle died in January, but his legacy lives on. The inventor of the first mutual index fund more than 40 years ago, Bogle was a huge believer in the power of numbers and low investing costs. His beliefs are as valid today as they were decades ago. Here are three pieces of wisdom that still apply:

Bogle believed in mutual funds’ ability to spread risk by diversifying their holdings. Mutual funds that hold many equities potentially reduce risk because the expected positive performance of some may mute the negative returns of others.

Bogle took the numbers concept to its next logical conclusion: If holding many stocks could reduce risk, owning shares of every stock in a given index would reduce it even more. In 1976 he introduced what became the Vanguard 500 Index Fund, and followed that up with other stock and bond index funds.

A proponent of low-cost investing early on, Bogle’s index funds reduced expenses to levels not typically seen in the mutual fund world. To this day, expenses can have an outsized effect on investment performance, potentially having a greater effect than market performance itself.


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