While researching my article on The Best Investors of All Time, the term Bogleheads kept coming up when I was researching Jack Bogle. For a quick refresher, Jack Bogle is the founder of Vanguard, and a champion of low-cost simple investing philosophies. However, his basic principles have been extolled upon by several other mainstream finance authors, as well as thousands of other self-proclaimed Bogleheads. They have put together a website to champion this investing advice inspired by Jack Bogle here: Bogleheads.
What Do Bogleheads Follow?
Bogleheads follow several simple investing philosophies:
- Live Below Your Means
- Invest Early and Often
- Never Take on Too Much Risk, or Accept Too Little
- Don’t Time the Market
- Use Index Funds
- Keep Costs Low
- Minimize Taxes
- Keep It Simple
- Stay The Course
How to be a Boglehead
Bogleheads invest and keep it simple by buying mutual funds or ETFs that try to mimic the entire market. Or, to build a proper asset allocation for their own individual needs, they may buy a stock mutual fund and bond mutual fund to be diversified in both asset classes. When buying these funds, they pay special attention to fees, and only invest in funds with low fees and expenses.
Taxes are also a huge consideration. To maximize tax efficiency, investment vehicles like 401ks and IRAs are the preferred mediums.
Finally, they stay the course – the stock market goes down, they keep investing. The stock market goes up, they keep investing.
What do you think of the Bogleheads? Are you one of them?