Index funds


#TIA – We admired Jack Vogel and Vanguard when he was alive and are quick to honor his memory posthumously. His easy approach to investing may well have been the right one.

Vanguard founder Jack Bogle died January 16 at age 89. He built it into an investing colossus, with more than $5 trillion (with a t) under management. But his most lasting impact will likely be his evangelization of the humble index fund—a low-fee alternative to pricey mutual funds that revolutionized finance and made millions of Americans measurably richer (and Wall Street poorer). In doing so, JC de Swaan argues, he did more social good than anyone in his industry.

Index funds are a simple concept with powerful implications. Instead of trusting a financial analyst to purchase a bundle of stocks in a mutual fund—carefully threading the needle to assemble the perfect mix of safety and growth—shares in an index fund are held in proportion to their size in the stock market. An S&P 500 fund, for example, will hold shares of the 500 biggest companies in the stock market, from Microsoft to News. Corp., weighted by their market capitalizations.

Read more at Quartz