BALTIMORE ( Stockpickr) -- While it's not uncommon to think of "the market" as a single unit, that hasn't always been the case. Even though stock market indices such as the S&P 500 and the Dow Jones Industrial Average have existed for decades, they were once more like sentiment indicators than the investible instruments that they are today.
That all changed when Vanguard founder Jack Bogle came to the realization that few mutual fund managers beat the broad market in the long-term. To combat that, in 1975 Bogle created the Vanguard 500 Index Fund (VFINX), the world's first index fund. Unlike traditional actively managed funds, the Vanguard 500 didn't seek to select the best investments in the world -- instead, it exactly mirrored the well-known S&P 500 index.
Although other fund managers thought that that index funds were a poor idea (the Vanguard 500 fund was originally referred to as "Bogle's Folly" and didn't initially raise enough capital even to buy all 500 of the S&P stocks), the result has been transformational to the investment world. Index funds are now one of the most prevalent mutual fund vehicles out there, and Bogle's once-mocked fund rings in as one of the biggest, with nearly $100 billion under management.