I was sad to hear of the death of Jack Bogle last week. Jack was the “father” of modern index funds. He founded Vanguard Investments in the 1970s. His no-load, low-fee index fund was a major innovation in a world where investing had been only available to those who were willing to pick their own stocks or pay professional fund managers large fees to get results that weren’t statistically any better than a broad market index.
An index fund invests in all of the shares in the market (or the index that measures the market) – there are no investment decisions to make, and very little trading is necessary. This innovation has delivered market returns to small investors all over the globe at very low cost .
So, why am I talking about Jack Bogle and index funds on a website devoted to Australia/US cross-border tax issues? Because nonresident US citizens are punished for owning local versions of this basic investment!Continue reading “Remembering Jack Bogle”