Bogleheads Worship Index Funds for Investment Portfolios

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You may have heard of Bogleheads, a group of investment enthusiast who worship index funds for their portfolios and honor John Bogle, the man behind index funds and founder of the company Vanguard.

Bogleheads communicate with one another in a investing community, giving each other tips and advice on investing. Some Bogleheads even get together and meet at annual meetings and local chapter get-togethers and Jon Bogle himself even shows up at some of those meetings and get-togethers from time-to-time. In fact, the Boglehead community has been having annual meetings every year since 2000, and Jon Bogle has been at everyone.

 

How the Boglehead Community Began

The Boglehead community was created by a man named Taylor Larimore, who is now called “The King of the Bogleheads” and has posted more than 22,000 post on the Boglehead forum!

 

Why Bogleheads Love Index Funds and Honor Jon Bogle

So why should you also honor Jon Bogle? Well for one reason, if you own any index funds in any of your retirement or other brokerage accounts, you may have him to thank for that. Bogle basic started the indexing revolution and for years claimed that index funds are one of the best ways to invest, better than professionally managed mutual funds. Even when critics and mutual fund managers said differently, Bogle still stood by his belief in index funds.

Now years later, there is proof that index funds on average beat and out-perform managed mutual funds and picking stocks individually. To learn more about index funds and why they might be a good investment for you, read the article titled, Eight Reasons Why Index Funds Rock!  

 

Bogleheads Support One Another and All Hold the Same Core Belief

If you’re thinking you might want to become a Boglehead, you could gain great investing advice and support by doing so from their community of like-minded people. Bogleheads help and support follow members by providing advice that has saved many people from making horrible investment decisions. Also, all Bogleheads hold one core belief –– that no individual can beat the market, whether with professionally managed mutual funds or by picking stocks individually.

Bogleheads will take an index fund over a managed mutual fund any day. Why? Because they all believe in the long-run indexing will outperform managed funds, not to mention the high costs and fees that come with managed funds. They’re not all talk either, they have proof and facts to back that belief up.

For instance, in 2014 only about 1/4th of all actively managed mutual funds that held U.S. stocks actually surpassed the benchmarks they had in place for that year. Even if you find a professionally managed mutual fund that has out-performed the market in recent years, you would probably lose money if you invested in that fund now, as its high-performance run would probably begin to drop.

If you’re thinking about investing, Vanguard has many index funds with extremely low-fees to choose from. You can view the different funds they have and fees associated with them at Vanguard.com.

 

How to Become a Boglehead

To become a Boglehead, you need to do these three things. The first thing you need to do is be a regular investor, by that I mean investing the maximum amount your budget allows you. The second thing is to have the correct asset allocation mix of stocks and bonds based on your current age and financial goals you have. The third thing, is your portfolio should be made up primarily of low-fee index funds.

Besides the three key things listed above, you also have to remember not to let your emotions drive your investing decisions, doing so could be fatal to your portfolio, as your likely to sell low and buy high by. Also, don’t over analyze your portfolio. Over analyzing and continually checking your portfolio can cause you to panic anytime you see a decrease in amount. Instead only check your portfolio once or twice making any changes or adjustments to it then.

If you’re not already a Boglehead, you can join the community and begin engaging with other Bogleheads by going to the Bogleheads website and forum. Their website and forum is very simple and basic but has over 45,000 members and receives over a 1,000 posts per day.

Author: Tyler DeBroux

Tyler started Oddball Wealth towards the end of 2014 after graduating college, as a way to stay relevant in his area of study, stimulate his mind, and to educate and help others.

Tyler has worked in the financial services industry, as a financial advisor, helping his clients make wise financial decisions and personalized long-term financial plans. Since graduating college in December of 2014, Tyler has paid off more than $15,000 in student loan debt and counting, his goal is to have all his student loans paid in full by the in of 2016.

Tyler is an entrepreneur and an expert in personal finance. Two of his many hobbies include investing and building online businesses. He is also a big advocate of early retirement and an aggressive saver, who utilizes any financial resources and tools available to him to help reach his goals for achieving financial independents.

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