Jack Bogle, the Founder and former Chairman of The Vanguard Group, was interviewed on a number of subjects at the Morningstar Investment Conference last week.  Bogle is perhaps most famous for creating the first index mutual fund that was easily accessible to individual investors.  Index funds were very unconventional when they were first introduced in the 1970s and many regarded the concept as “defeatist” – after all, who would be satisfied with being just “average”?

Of course, when fees and expenses are taken into account, most actively managed mutual funds will end up underperforming the market.  My view is that most individuals do not have the time or interest to actively manage their funds. Even more critical is the reality that most individuals do not have the temperament required to avoid being snared by bubbles and collapses. Unless such investors can confidently delegate the task to managers with long term proven records, indexing is a viable option to ensure that results are at least not below average.

I find that many investors and portfolio managers look at index funds with disdain, but this sentiment is misplaced.  Index funds merely provide ordinary people with the ability to at least match market returns and avoid disasters.  This is no threat to those of us who wish to aim for better results and a great service to a large number of ordinary people.

Let’s listen to what he has to say about the latest bear market, return expectations, and various other topics. Bogle’s comments on the importance of the balance sheet and earnings quality (Parts 1 and 2) are particularly compelling.

Part 1: This Bear Market’s the Worst I’ve Seen

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Part 2: Today’s Return Expectations

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Part 3: Buy and Hold is Eternal

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Part 4: Keeping Your Portfolio on Track

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Part 5: What the Business of Investing is All About

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