Part 9/11:
As we evaluate these findings, one cannot overlook the groundbreaking work of economist William Sharpe in portfolio theory. By conceptualizing the market as a single entity whose performance is based on collective investor choices, we begin to understand the advantages of investing in index funds. The market portfolio, as defined by Sharpe, captures the cumulative wisdom of all investors, making it a powerful tool for individual investors seeking growth without incurring the high costs associated with active trading.
John Bogle, the founder of Vanguard, revolutionized investing by bringing Sharpe's idea to the masses in the form of index funds, providing a vehicle for passive investment that eliminates excessive fees and allows ordinary investors to benefit from market growth over time.