Simple theory here. The reason that Jack Bogle was successful with his Vanguard Funds is the power of a good idea. He allowed the average person the opportunity to invest in a diversified stock market portfolio, at low costs, with maximum stability. Something that would be almost impossible except for wealthy individuals that could afford to assemble a broad portfolio.

If you were to buy shares of the four large companies (BRK.A excluded), you would own brand names with thousands of products. GE would give you coverage in aircraft engines, water purification, power generation, airport security, medical equipment for MRIs, and finance. JNJ adds medical products and supplies for an aging population and Band-aids for youth, prescription and over-the-counter medicines, household products, home care and personal care products to name just a few. PG extends the household care and personal care products bringing a highly successful line of food products to your table. The acquisition of Gillette has reinforced its business lines and brought Buffett to your table and that is a real business buffet, pun intended. To round out your portfolio PEP extends the power of brands to the world of fast food franchises, packaged food products, ready to cook meals, energy drinks water and more.

So these four companies would provide diversity, quality management, scale, international business, enduring products (health, water, food, security) and long histories of success. They would also pay a higher average dividend than an index fund (Index 500 is 1.85% vs 2.39%), no short term gains since you are not trading, and no marketing costs or fees. All the benefits and none of the costs. So if Bogle likes low fees, he has to love no fees.

Yesterday's closing prices: GE $35.48, JNJ $61.22, PG $62.96, PEP $64.18 If you bought 50 shares of each it would cost $11,192. Not an insurmountable investment.

Disclosure: I own BRK and JNJ, as of today's date.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.