Get new articles by email:

Oblivious Investor offers a free newsletter providing tips on low-maintenance investing, tax planning, and retirement planning.

Join over 19,000 email subscribers:

Articles are published every Monday. You can unsubscribe at any time.

Paul Samuelson, and What We Owe Him

“A respect for evidence compels me to incline toward the hypothesis that most portfolio decision makers should go out of business.” – Paul Samuelson

Paul Samuelson, 1970 winner of the Nobel Memorial Prize in Economic Sciences, died today.

Samuelson had a tremendous influence in the field of economics. (And judging from Amazon sales ranks, his book Economics might be the single most-used economics textbook in print.)

The reason I’m writing about him here, however, is that he played a direct role in the creation of the first index fund.

In John Bogle’s Common Sense on Mutual Funds, he credits Samuelson’s article “Challenge to Judgement” as serving as an inspiration for his creation of the Vanguard Index Trust (the first retail index fund, now known as the Vanguard 500 Index Fund).

Bogle writes:

“[Samuelson] pleaded ‘that, at the least, some large foundation set up an in-house portfolio that tracks the S&P 500 Index–if only for the purpose of setting up a naive model against which their in-house gunslingers can measure their prowess.’…Samuelson had laid down an implicit challenge for somebody, somewhere to launch an index fund.”

It it weren’t for Samuelson, Bogle, and other thought leaders of that era, we might still be stuck constructing diversified portfolios stock-by-stock or paying the unwarranted fees (and shouldering the uncompensated risk) that come with active management.

New to Investing? See My Related Book:


Investing Made Simple: Investing in Index Funds Explained in 100 Pages or Less

Topics Covered in the Book:
  • Asset Allocation: Why it's so important, and how to determine your own,
  • How to to pick winning mutual funds,
  • Roth IRA vs. traditional IRA vs. 401(k),
  • Click here to see the full list.

A Testimonial:

"A wonderful book that tells its readers, with simple logical explanations, our Boglehead Philosophy for successful investing." - Taylor Larimore, author of The Bogleheads' Guide to Investing


  1. kosmo @ The Casual Observer says

    Sometimes it amazes me how many things that appear so obvious in hindsight were not so obvious in the beginning.

Disclaimer: By using this site, you explicitly agree to its Terms of Use and agree not to hold Simple Subjects, LLC or any of its members liable in any way for damages arising from decisions you make based on the information made available on this site. The information on this site is for informational and entertainment purposes only and does not constitute financial advice.

Copyright 2022 Simple Subjects, LLC - All rights reserved. To be clear: This means that, aside from small quotations, the material on this site may not be republished elsewhere without my express permission. Terms of Use and Privacy Policy

My Social Security calculator: Open Social Security