Chuck Jaffe interviews Vanguard founder John Bogle

Marketwatch's Chuck Jaffe recently conducted an interview with the greatest friend the individual investor has ever had: John Bogle.

Bogle banged the drum for the cause he has made famous: Active investing generally leads to poor returns, and the best thing an investor can do is buy index funds and rely on the long-term returns generated by businesses to create long-term portfolio success.

Jaffe asked Bogle for his reaction to the numerous market gurus who have suggested that the future returns of the market will be lower than in the past. Bogle explained that lower dividend yields and slower earnings growth will lead to an average annual return of around 7%, more than 2% less than the historical yield of the market. What should investors do about that? They just have to save more money, according to Mr. Bogle.

Bogle remains a big supporter of traditional index funds, and isn't too impressed with ETFs or hybrid funds. As he said in a recent column, "Mama, what have they done to my song?"

All of his books are terrific, but an absolute must-read is his tome on corporate governance, The Battle For the Soul of Capitalism.