35 Years Ago: The index fund is born

A revolution of sorts started 35 years ago, on Aug. 31, 1976, when John C. Bogle launched the Vanguard 500 Index Investor (VFINX -0.16%), a mutual fund that holds all the stocks in the Standard & Poor's 500 Index ($INX -0.17%).

It was the first fund to let individual investors own the broad stock market rather than actively trying to beat it.

"It was a seminal event in investing," says Dan Culloton, associate director for fund analysis at Morningstar. "It introduced passive investing to retail investors and eventually started a slow and steady revolution that continues today."

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I don't often have nice things to say about Wall Street investors. Jack Bogle is a rare exception. He is as honest as the day is long, and he has spent most of his professional life trying to help the ordinary guy make a little money without getting fleeced by the crooks that prowl The Street. He is the author of many books on investing (most of which are easily readable). I would recommend any of them. Bottom line; low cost - broadly diversified index funds remain one of the best and safest ways to invest for the long term. Thank you Mr. Bogle.

P.S. Anyone interested in getting a primer on index funds and why they work so well might want to visit here.