The Bogleheads' Guide to Investing Paperback – Sep 28 2007
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From the Back Cover
The Bogleheads' Guide to Investing
"If you master the concepts laid out in this book, you'll do very well."
"Kindness, integrity, and common sense can be scarce on Wall Street, but the Bogleheads have each in abundance. Reading The Bogleheads' Guide to Investing is like learning investing from your grandfather. There's a lifetime of wisdom packed into these pages, coupled with a sincere desire to help investors meet their goals. Jack Bogle will be proud!"
Don Phillips, Managing Director, Morningstar
"The Vanguard Diehardsa.k.a. the 'Bogleheads'are easily the planet's most well-informed, congenial, and successful group of individual investors. At long last, they're letting the general public in on their solutions, their secrets, and their strategies. If you're about to retire, are planning to retire, or are even thinking of retiring, you can't afford not to read this book."
William J. Bernstein, cofounder, Efficient Frontier Advisors, LLC
author of The Intelligent Asset Allocator and The Four Pillars of Investing
"More than thirty years ago John Bogle started a war in the mutual fund industry. His weapon was low fees, and his shield was common sense. In this book, three ardent followers sagely outline Bogle's approach that has benefited millions and will benefit millions more."
Richard Ferri, CFA, President, Portfolio Solutions LLC
author of The ETF Book: All You Need to Know About Exchange-Traded Funds (Wiley/December 2007)
"Those investors who have the courage, discipline, and wisdom to follow the sound financial and investment strategies of The Bogleheads' Guide to Investing are virtually certain to achieve results superior to not only the vast majority of individual investors, but the vast majority of professionals as well. What is perhaps more important is that the quality of their lives will be improved because they will have more time to spend on the really important things in their lives."
Larry Swedroe, author of The Only Guide to a Winning Investment Strategy You'll Ever Need
About the Author
Taylor Larimore, Mel Lindauer, and Michael LeBoeuf are three millionaires who met online and combined their investing experience and efforts to help others. The authors have contributed over 40,000 posts on the Diehards and Bogleheads forums. You can read more about each of them in "About the Authors" on page 293.
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Top Customer Reviews
Only downside for me was the large amount of US-specific advice (I'm Canadian). I would still suggest this book to Canadian readers, but it should probably be supplemented with another book (or just online info) describing Canadian investment and savings options.
Most Helpful Customer Reviews on Amazon.com (beta)
My background: I have read (and own) dozens of investment books. I have subscribed to many newsletters (including Morningstar's, which is decent but unnecessary after you read this book). I have owned many individual stocks and for the last 2-3 years before I got the Boglehead religion I was lucky and beat the market averages buying individual stocks (although for most of my life I've lagged far below the market). I opened my first brokerage account in 1990, and I've been self-directed ever since. I've had 400%+ years as well as -70% years. I've even been in the top 100 virtual mutual funds on Marketocracy (out of 70,000), and I've written custom software to analyze the daily performance of the top 1500 stocks.
Having said all that, I wish that I had followed the investment principles laid out in this book from the very beginning. I would have a lot more money than I do now.
Before reading this book, I already had all my retirement money in Vanguard index funds. So you would think, end of story, you're already a believer. NOT SO! While I started out using the Target Retirement funds, which allocates your money properly for your age, I slowly deviated from those funds into the higher risk emerging markets index fund, because that fund was doing so well. It's easy to read this book and say, "oh that makes sense", stay the course for a year or so, then get seduced by the hot performance of a particular sector and lose your way. For these principles to work, you really have to apply them relentlessly, and I think that it takes either someone with an iron discipline or someone who's acquired "experience" in the market (i.e., losses that hurt) to recognize the wisdom of this book and follow it.
Years ago, I read John Bogle's book on index funds, and I agreed with the logic of what he was saying. Then I proceeded to ignore it for most of my investing career before I really "got" what he was saying.
Perhaps, if you're a beginner, you'll follow this book and avoid the pain and losses. The principles are easy enough to understand. In fact, if you want to save the price of the book, simply go to Vanguard, pick your retirement date, buy a "Target Retirement" fund for that date, and you're done. That's pretty much what the book tells you to do.
BUT, you'll need the book (and, in my opinion, the "experience" of following the 99% of the misleading advice out there) to really understand why this is the real way to go. You almost have to read this book every year as an antidote to the temptation that assaults you nonstop from Wall Street and CNBC and all the financial magazines.
If you're a beginning investor, this is it. This book is the mother lode. You can stop looking. Unfortunately, it may take you 10-15 years and many large losses to realize this (as I had to do), but take it from me (some random anonymous person on the Internet), this is the REAL DEAL.
Knowing what I do now, if at age 21 I'd had my choice of $2,000,000 or the wisdom to understand the concepts in this book, I'd choose wisdom. Here are two examples from this book to illustrate why. On page 13 of this book Jack Bogle relates a letter that he received in early 2005 about someone who's been investing with Vanguard for about 30 years, and whose portfolio had grown to over $1.25 million, but he'd never made more than $25,000 in any year in his life. Although they knew nothing about his specific investing history (maybe he just got lucky? we don't know), this figure is attainable investing $600 a month in a Vanguard stock index fund over 30 years.
On the other hand, according to an NBC News report related on page 180 of the book, more than 70 percent of lottery winners exhaust their fortunes within 3 years.
So, clearly, doing the right thing is going to have a huge impact on how much money you end up with.
Even the most experienced investors will benefit from this book (and in fact, may benefit more) by simplifying their portfolio. The chapters on asset allocation and taxes are extremely insightful, even to non-beginners.
After reading this book, I immediately re-balanced my Vanguard portfolio to better fit my age group, and to lower the risk that I was taking.
Even as an "experienced" investor already in Vanguard index funds, I learned something actionable that I was immediately able to apply. If you consider yourself an "experienced" investor, you will also benefit from reading this book. I highly recommend it. My ENTIRE retirement portfolio is in Vanguard index funds, allocated in the recommended amounts, so this is not an idle recommendation.
Read it and live it.
(Just so you know, I have never visited the Boglehead web site, and I have never corresponded with any of the authors. I'm just an uninterested third party who's a big fan of this book).
Also trying to beat there strategy may only work for a small lucky percentage. So read this book and you really do not need to read any further.
I learned my lesson, the hard way. The truth of the matter is, adhering to the simple, methodical strategies professed by the Bogleheads is your best bet to financial independence; it's a process that evolves over time; there's no get rich quick formula, but there is a "get rich eventually" formula which is practically guaranteed to work, every time, if the investor is patient enough to stick to the game plan.
This book was first published when the stock market seemed to be a safe haven, and owning your own house seemed to be a wonderful way to build equity. The latter part of 2008 and most of 2009 have been anything but an investor's paradise; rather, it's been a nightmare for most; a time of troubled investment waters where many have drowned in a tidal wave of portfolio disaster.
If you stuck to the principles of Boglehead Investing, chances are, you weathered the storm better than most; the advice given in this wonderful book is even more valuable now than ever. For anyone trying to build a financial plan that will weather the storm of economic downturns, this is the one book to own.
Extremes in volatility we see now are not unprecedented, and things WILL get better. Many investors invest emotionally, and that is one of the biggest things that will burn you. Don't fall for it. Hold fast, hold tight, and you will be just fine. Read this book and heed its advice!
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