NEW YORK -- It was inevitable, with a millennium ending, that someone would compile a list of the greatest investors of the 20th century.
Someone has. The Carson Group, a New York consulting firm, compiled a Top 10 list from a survey of over 300 investment professionals.Not surprisingly, Berkshire Hathaway Chairman Warren Buffett tops the list, followed by longtime Fidelity fund manager Peter Lynch in second place, and John Templeton of the Templeton Group in third.
Benjamin Graham and David Dodd, considered the founders of so-called value investing, and hedge fund guru George Soros round out the top five.
Not until seventh place does the name of Vanguard Group founder John Bogle appear. Bogle is known as the father of index fund investing, a low cost, low risk strategy that has come to dominate the American investment landscape.
Since these types of Top 10 lists are created to stir debate, Bogle's ranking raises the question of who was the most influential investor of the past century -- not merely the money manager with the best performance track record.
For some, at least, the nod goes to Bogle.
There's little argument that Buffett is the most famous investor of the past 100 years, and certainly the wealthiest. But, to some, his legacy has been more symbolic than tangible. Buffett showed that an individual investor, by using discipline and patience, can outperform the broader market. He is considered an inspiration to millions of other investors who seek to do the same.
Bogle, on the other hand, said individual investors should join the markets, as it were, rather than try to beat them. His low-cost index funds, which were introduced in the mid- 1970s and seek to mirror the results of the broader market, have allowed millions of investors to participate in the greatest economic boom in American history.
Consider that investors can purchase shares in a Vanguard index fund for as little as $1,000. Moreover, many of the thousands of index funds that have emerged in the wake of Bogle's creation are even less expensive.
Meanwhile, a single class B share of Buffett's Berkshire Hathaway firm recently cost $1,900. But keep in mind, those lower-cost shares have only been available since 1996. Prior to that, Berkshire Hathaway shares were only available to the wealthy. Indeed, a single Berkshire Hathaway Class A share recently cost nearly $59,000.
"Bogle was the guiding spirit behind making index fund investing broadly available to American investors. And that democratization of capital has been one of the most important phenomena of the 20th Century," said William Goetzmann, director of the International Center for Finance at Yale University.
Many economists believe the long-running bull market and the sustained strength of the U.S. economy is a direct result of the seemingly endless flow of money by average income investors into mutual funds, whose assets are then reinvested in the stock market.
The cycle has allowed thousands of start-up companies in formerly unknown sectors such as the Internet to expand and create jobs due to the ease with which new firms can access money through the public equity markets.
Dan Wiener, editor of The Independent Adviser for Vanguard Investors, a newsletter that tracks the performance of Vanguard funds, acknowledged the contributions of both Buffett and Bogle. But he dismissed Top 10 lists that glorify individuals as "stupid" and "useless."
Instead, Wiener suggested that individual investors as a whole have had the most impact on the investment process during the last century. By educating themselves and focusing their commitment to saving and investing, average American investors by the millions have linked their futures to that of the U.S. market system, Wiener said.
That dynamic has in turn served as a primary support system for the economic prosperity Americans are now experiencing.