The future of Boglehead philosophy

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Brofessor
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The future of Boglehead philosophy

Post by Brofessor »

Hello all. Thanks for all your insights as I lurk on the forum over all these years. There is a lot of enjoyable reading here.

How will "Bogleheads" adapt to future changes? If Mr. Bogle had remained immortal, he could have made dictatorial adjustments to the core principles of his philosophy as circumstances change. However, upon his passing, who is our leader now? Taylor Larimore? Rick Ferri? Mr. Bogle was the real-deal when he turned Vanguard over to the investors instead of privatizing it similar to Fidelity which enriches its management team by the nature of its corporate structure. Who could earn our trust now? Who will we listen to? Our we now a democracy? Could we use polls and votes to make adjustments to our guiding principles?

What would be the process for making adjustments to the core philosophy in the face of future unknown market changes which might seem to require bogleheads to adapt or improvise? I am thinking 10 years into the future or even 100 or 200 years into the future. What if new exotic investment vehicles are invented? New tax laws? Who has the authority to publish a new book or make major changes to the online wiki advice? Could we even change the 3 fund portfolio? Would it literally take us 100 years of negative returns to admit we were wrong and change our asset allocation? Or will we always "stay the course."

Some eternal debates are about % international stocks, % foreign government bonds, % REIT, and "Age-in-bonds." At what point would there be a consensus on these topics? Are they all currently near a tipping point in the consensus or are they simply victims of "recency-bias."

Can any of you predict where the first official "change" in boglehead philosophy would occur? Can any of you predict how this forum or wiki might evolve? Who might become a quasi-official leader of Bogleheads?

Thanks
GLState
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Re: The future of Boglehead philosophy

Post by GLState »

The wiki sums up the boglehead philosophy :
"In summary, a Bogleheads investor tends to (1) save a lot, (2) select an asset allocation containing both stock and bond asset classes, (3) buy low cost, widely diversified funds, (4) allocate funds tax-efficiently, and (5) stay the course."

This philosophy should be easy to put into practice well into the future.

It is not written in stone that a true boglehead shall have a 60/40 portfolio with 20% in international equity. The 3 fund portfolio is an excellent portfolio, but there are many other excellent portfolios that also follow the boglehead principles.
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galawdawg
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Re: The future of Boglehead philosophy

Post by galawdawg »

Why should there be any change in Bogleheads investing principles?

After all, the Bogleheads® investment philosophy is:

1. Develop a workable plan
2. Invest early and often
3. Never bear too much or too little risk
4. Diversify
5. Never try to time the market
6. Use index funds when possible
7. Keep costs low
8. Minimize taxes
9. Invest with simplicity
10. Stay the course

And here are some highlights of what Jack Bogle had to say on investing"
Don't look for the needle in the haystack, just buy the haystack!

Diversify, focus on low costs, invest for the long term. Don’t speculate – and don’t be distracted by volatility.

Time is your friend, impulse is your enemy.

Owning the stock market over the long term is a winner's game, but attempting to beat the market is a loser's game.

The greatest enemies of the equity investor are expenses and emotions.

Rely on the ordinary virtues that intelligent, balanced human beings have relied on for centuries...common sense, thrift, realistic expectations, patience and perseverance.

Your success in investing will depend in part on your character and guts, an din part on your ability to realize at the height of ebullience and the depth of despair alike that this too shall pass.

The winning formula for success in investing is owning the entire stock market through an index fund, and then doing nothing. Just stay the course!
Principles are built upon fundamental truths. They are timeless. As a result, they aren't tossed and turned by shifting winds, cultural changes, erroneous teachings or personal preferences. And no, this time is not different! :happy
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oldzey
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Re: The future of Boglehead philosophy

Post by oldzey »

Mr. Bogle remains immortal in my eyes.

To me, changes in the philosophy would be akin to trying to change what Stephen Covey called natural laws (i.e., lighthouse principles such as honesty, fairness, growth, potential, etc.).

Can YOU predict where the first official "change" in Boglehead philosophy would occur? If you're stuck, consider the opposites. For example, invest late and infrequently, time the market, keep costs high.

Cheers!
:beer

oldzey

BOGLESHEADS’ PRINCIPLES:
1. Live Below Your Means
2. Asset Allocation (Holding Bonds) Is Essential
3. Buy Low Cost Funds that are Widely Diversified
4. Tax Efficiency Matters
5. Stay the Course

BOGLESHEADS’ INVESTMENT PHILOSOPHY:
1. Develop a workable plan (live below your means)
2. Invest early and often
3. Never bear too much or too little risk
4. Diversify
5. Never try to time the market
6. Use index funds when possible
7. Keep costs low
8. Minimize taxes
9. Invest with simplicity
10. Stay the course
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
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goingup
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Re: The future of Boglehead philosophy

Post by goingup »

oldzey wrote: Wed Jun 23, 2021 10:04 am
BOGLESHEADS’ PRINCIPLES:
1. Live Below Your Means
2. Asset Allocation (Holding Bonds) Is Essential
3. Buy Low Cost Funds that are Widely Diversified
4. Tax Efficiency Matters
5. Stay the Course
I haven't read this elsewhere. It's really not correct to write something like that and title it Boglehead's Principles IMO.

The Bogleheads Philosophy is published and appears in the Wiki.
lazynovice
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Re: The future of Boglehead philosophy

Post by lazynovice »

“….instead of privatizing it similar to Fidelity which enriches its management team by the nature of its corporate structure.”

Do you know what anyone at Vanguard makes? I don’t. We have no idea if this is true.
“I didn’t want my sailboat to be in the driveway when I died.” Nomadland
Mike Scott
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Re: The future of Boglehead philosophy

Post by Mike Scott »

Bogle's ideas (from 50ish years ago) were the equivalent of creating a new technology for implementing age old common sense saving/investing principles. The principles are older than Bogle and will probably remain relevant for a very long time. However, the technolgies for implementing these principles will probably continue to change as regulatory and fundamental financial market structures evolve. Bogleheadism is not a religion with rules and such that must be maintained to remain pure and faithful.
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CyclingDuo
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Re: The future of Boglehead philosophy

Post by CyclingDuo »

Brofessor wrote: Wed Jun 23, 2021 8:40 amCan any of you predict where the first official "change" in boglehead philosophy would occur? Can any of you predict how this forum or wiki might evolve? Who might become a quasi-official leader of Bogleheads?
Your software does not need to be updated...

:sharebeer
"Save like a pessimist, invest like an optimist." - Morgan Housel
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oldzey
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Re: The future of Boglehead philosophy

Post by oldzey »

goingup wrote: Wed Jun 23, 2021 10:20 am
oldzey wrote: Wed Jun 23, 2021 10:04 am
BOGLESHEADS’ PRINCIPLES:
1. Live Below Your Means
2. Asset Allocation (Holding Bonds) Is Essential
3. Buy Low Cost Funds that are Widely Diversified
4. Tax Efficiency Matters
5. Stay the Course
I haven't read this elsewhere. It's really not correct to write something like that and title it Boglehead's Principles IMO.

The Bogleheads Philosophy is published and appears in the Wiki.
Thanks for the feedback - I actually missed one: https://www.forbes.com/sites/theboglehe ... ae2ce345a3

Here is the updated list:

BOGLESHEADS’ PRINCIPLES:
1. Live Below Your Means
2. Simplicity
3. Asset Allocation (Holding Bonds) Is Essential
4. Buy Low Cost Funds that are Widely Diversified
5. Tax Efficiency Matters
6. Stay the Course
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
aristotelian
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Re: The future of Boglehead philosophy

Post by aristotelian »

Part of Bogle's genius was he taught people to do it themselves. I don't think Bogleheads need a leader now that the ideas and tools are available to everyone.
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Re: The future of Boglehead philosophy

Post by jakehefty17 »

Brofessor wrote: Wed Jun 23, 2021 8:40 am Hello all. Thanks for all your insights as I lurk on the forum over all these years. There is a lot of enjoyable reading here.

How will "Bogleheads" adapt to future changes? If Mr. Bogle had remained immortal, he could have made dictatorial adjustments to the core principles of his philosophy as circumstances change. However, upon his passing, who is our leader now? Taylor Larimore? Rick Ferri? Mr. Bogle was the real-deal when he turned Vanguard over to the investors instead of privatizing it similar to Fidelity which enriches its management team by the nature of its corporate structure. Who could earn our trust now? Who will we listen to? Our we now a democracy? Could we use polls and votes to make adjustments to our guiding principles?

What would be the process for making adjustments to the core philosophy in the face of future unknown market changes which might seem to require bogleheads to adapt or improvise? I am thinking 10 years into the future or even 100 or 200 years into the future. What if new exotic investment vehicles are invented? New tax laws? Who has the authority to publish a new book or make major changes to the online wiki advice? Could we even change the 3 fund portfolio? Would it literally take us 100 years of negative returns to admit we were wrong and change our asset allocation? Or will we always "stay the course."

Some eternal debates are about % international stocks, % foreign government bonds, % REIT, and "Age-in-bonds." At what point would there be a consensus on these topics? Are they all currently near a tipping point in the consensus or are they simply victims of "recency-bias."

Can any of you predict where the first official "change" in boglehead philosophy would occur? Can any of you predict how this forum or wiki might evolve? Who might become a quasi-official leader of Bogleheads?

Thanks
Bogleheads is constantly adapting and expanding as a community... and it was never "dictatorial". We don't need a particular person to rally behind, only a set of guidelines. Forum guidelines are already established. Investing principles need not change for the foreseeable future but if they do, I'm sure the forum will be ripe with debate. It's more of a roman empire... except we're just the philosophers... maybe?

As for the need to adapt and improvise as new investment vehicles are construed and tax laws change... those things have already happened and you should already know the answer. Discuss new things in the forum. Propose changes in the forum. I remember ETFs coming out and all the questions surrounding them on the forum. I learned everything I needed and more, almost immediately.

Eternal debates will remain eternal. There was never meant to be a consensus. It's one of the things I love about the forum. You choose your own destiny, and as long as you're following the general guidelines, we're all happy. It's your money after all.

I can't predict the future. Bogleheads taught me that. Nobody knows nothin.

I will predict one thing... more "smilies"... really wanted a shrug emoji for my first paragraph. Maybe that's just because I'm a millennial. Meh.
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." -Charles Bukowski
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goingup
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Re: The future of Boglehead philosophy

Post by goingup »

oldzey wrote: Wed Jun 23, 2021 10:32 am
goingup wrote: Wed Jun 23, 2021 10:20 am
oldzey wrote: Wed Jun 23, 2021 10:04 am
BOGLESHEADS’ PRINCIPLES:
1. Live Below Your Means
2. Asset Allocation (Holding Bonds) Is Essential
3. Buy Low Cost Funds that are Widely Diversified
4. Tax Efficiency Matters
5. Stay the Course
I haven't read this elsewhere. It's really not correct to write something like that and title it Boglehead's Principles IMO.

The Bogleheads Philosophy is published and appears in the Wiki.
Thanks for the feedback - I actually missed one: https://www.forbes.com/sites/theboglehe ... ae2ce345a3

Here is the updated list:

BOGLESHEADS’ PRINCIPLES:
1. Live Below Your Means
2. Simplicity
3. Asset Allocation (Holding Bonds) Is Essential
4. Buy Low Cost Funds that are Widely Diversified
5. Tax Efficiency Matters
6. Stay the Course
Thanks! I hadn't read that article by Laura in 2011 Forbes. I wonder if that was a draft of the Bogleheads Philosophy. I have never seen that list elsewhere.
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iceport
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Re: The future of Boglehead philosophy

Post by iceport »

goingup wrote: Wed Jun 23, 2021 11:36 am
oldzey wrote: Wed Jun 23, 2021 10:32 am
goingup wrote: Wed Jun 23, 2021 10:20 am
oldzey wrote: Wed Jun 23, 2021 10:04 am
BOGLESHEADS’ PRINCIPLES:
1. Live Below Your Means
2. Asset Allocation (Holding Bonds) Is Essential
3. Buy Low Cost Funds that are Widely Diversified
4. Tax Efficiency Matters
5. Stay the Course
I haven't read this elsewhere. It's really not correct to write something like that and title it Boglehead's Principles IMO.

The Bogleheads Philosophy is published and appears in the Wiki.
Thanks for the feedback - I actually missed one: https://www.forbes.com/sites/theboglehe ... ae2ce345a3

Here is the updated list:

BOGLESHEADS’ PRINCIPLES:
1. Live Below Your Means
2. Simplicity
3. Asset Allocation (Holding Bonds) Is Essential
4. Buy Low Cost Funds that are Widely Diversified
5. Tax Efficiency Matters
6. Stay the Course
Thanks! I hadn't read that article by Laura in 2011 Forbes. I wonder if that was a draft of the Bogleheads Philosophy. I have never seen that list elsewhere.

The simplest, most inclusive description I've come across is still Taylor's description from the old Vanguard Diehards forum:
Taylor Larimore wrote:In general, here is the Diehard philosophy:

1. Develop a diversified plan.
2. Use low-cost, low-turnover funds
3. Consider tax-efficiency
4. Keep investing simple
5. Stay the course
Note that even the omission of the word "index" was intentional.
"Discipline matters more than allocation.” ─William Bernstein
EfficientInvestor
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Re: The future of Boglehead philosophy

Post by EfficientInvestor »

One key component of Boglehead investing philosophy is diversification. Not just diversification within an asset, but diversification among assets. Current standard approaches endorse the use of stock-heavy (even 100/0) portfolios for aggressive investors. This widely accepted approach neglects the Boglehead principle of diversification among assets. The usual reason being that “you can’t eat risk-adjusted returns” and “there is risk in not taking enough risk”. To solve for this discrepancy of aggressive investors not being diversified among assets, I’m hopeful that Boglehead philosophy will change to be more accepting of a risk parity approach that aims to be diversified while still taking on the desired risk of the investor.
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Re: The future of Boglehead philosophy

Post by alfaspider »

I would propose an even more pared down description of BH philosophy, which to sum up is:

1) Live below your means so you can invest
2) Invest, don't speculate (meaning expect to earn ordinary returns from real economic activity, not extraordinary returns, and not returns because you think you can guess that a company or sector is mispriced)
3) When you invest, do it efficiently (avoiding unnecessary taxes and fees)

You can have a separate conversation about BH tactics. In my book, things like investing in index funds or being mindful of asset allocation are a tactic aimed at achieving Item #2, not core to the philosophy. Using tax advantaged accounts and avoiding financial advisors or active funds is a tactic to achieve 3. It's plausible that the investing landscape might change over time such that currently accepted tactics are no longer the best. Remember that 401ks and index funds didn't even exist 50 years ago! Who knows what the next 50 years might bring.
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Re: The future of Boglehead philosophy

Post by NAVigator »

True leaders leave a legacy. I am grateful for what I have learned and the principles by which I have used to generate my present lifestyle. I was fortunate to meet Jack Bogle and have learned from his writings. The future of this investment philosophy rests on its enduring success.
"I was born with nothing and I have most of it left."
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Brofessor
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Re: The future of Boglehead philosophy

Post by Brofessor »

Thanks for the replies. I am proposing we push the limits of our imagination and imagine 100 years or more of a bull run in a certain sector and investors beating the market for 100 years in that sector. Meanwhile, we would profess a diversified asset allocation and have worse returns in this scenario. We would be awaiting the "reversion to the mean." I suppose this wiki and forum would wither by attrition in this scenario and be re-discovered when the "reversion" occurs.
oldzey wrote: Wed Jun 23, 2021 10:04 am If you're stuck, consider the opposites. For example, invest late and infrequently, time the market, keep costs high.
You have a good point about "late and infrequently" Lol! However, I can imagine some strange future market where some new exotic CD does beat the market or a new equity concept with high costs does succeed for 100 or 200 years. We would avoid it due to high costs. Would we ever change the core philosophy? If so, how would we change the wiki? By a vote or a poll?
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Brofessor
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Re: The future of Boglehead philosophy

Post by Brofessor »

lazynovice wrote: Wed Jun 23, 2021 10:20 am “….instead of privatizing it similar to Fidelity which enriches its management team by the nature of its corporate structure.”

Do you know what anyone at Vanguard makes? I don’t. We have no idea if this is true.
You are correct. I meant to imply Mr. Bogle had credibility. He was beyond reproach in his dedication to the common man. I have read he could have turned Vanguard into a more "Fidelity-like" brokerage and greatly profited. He chose to forgo this income in the hopes of lowering costs even further. This is mentioned in a New York Times article from 1/6/2019 I pasted below...

"Vanguard’s consistent growth produced riches for Mr. Bogle, but not to the extent that another ownership structure might have done. For example, Edward C. Johnson III, the chairman of Fidelity Investments, has a net worth of $7.4 billion, according to Forbes. Mr. Bogle’s net worth was generally estimated at $80 million last year."

If I recall correctly, in a YouTube video Mr. Bogle even stated he was a Marxist. He seemed serious. It might have just been an economy of language or an expression. However, I do see a sort of co-op theme and democratic theme in his words and actions.

I am curious as to who might be our next Mr. Bogle. Someone who turns down millions has bona fides. We could trust that person. Who would we make a bobble head of in the future?
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Re: The future of Boglehead philosophy

Post by HootingSloth »

Brofessor wrote: Wed Jun 23, 2021 1:47 pm Thanks for the replies. I am proposing we push the limits of our imagination and imagine 100 years or more of a bull run in a certain sector and investors beating the market for 100 years in that sector. Meanwhile, we would profess a diversified asset allocation and have worse returns in this scenario. We would be awaiting the "reversion to the mean." I suppose this wiki and forum would wither by attrition in this scenario and be re-discovered when the "reversion" occurs.
oldzey wrote: Wed Jun 23, 2021 10:04 am If you're stuck, consider the opposites. For example, invest late and infrequently, time the market, keep costs high.
You have a good point about "late and infrequently" Lol! However, I can imagine some strange future market where some new exotic CD does beat the market or a new equity concept with high costs does succeed for 100 or 200 years. We would avoid it due to high costs. Would we ever change the core philosophy? If so, how would we change the wiki? By a vote or a poll?
If this is something that will only happen 100 years from now, it seems slightly premature to decide how "we" will address it.
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
SnowBog
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Re: The future of Boglehead philosophy

Post by SnowBog »

If you haven't yet, take a look at the wiki, which includes information on how to become an editor fyi change or even create new pages:
https://www.bogleheads.org/wiki/Main_Page

But the simple version is so long at this website and forum are running and people are engaging in the exchange of ideas, then the community can continue to learn and evolve.

That said, as others have noted, the underlying foundations seem like they'll stand the test of time with flying colors.

I'm sure there will be tweaks along the way - for example things like Roth didn't exist several years ago - maybe they'll be a newer better type of retirement account that will come along someday... But I don't envision massive changes to the core philosophy.
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Re: The future of Boglehead philosophy

Post by Fallible »

The future of BH philosophy and of all wise, common-sense investing philosophy could depend on whether and when the human brain evolves to one more rational, more patient, and more capable of long-term thinking.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Brofessor
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Re: The future of Boglehead philosophy

Post by Brofessor »

jakehefty17 wrote: Wed Jun 23, 2021 11:21 am Bogleheads is constantly adapting and expanding as a community... and it was never "dictatorial". We don't need a particular person to rally behind, only a set of guidelines. Forum guidelines are already established. Investing principles need not change for the foreseeable future but if they do, I'm sure the forum will be ripe with debate. It's more of a roman empire... except we're just the philosophers... maybe?

As for the need to adapt and improvise as new investment vehicles are construed and tax laws change... those things have already happened and you should already know the answer. Discuss new things in the forum. Propose changes in the forum. I remember ETFs coming out and all the questions surrounding them on the forum. I learned everything I needed and more, almost immediately.
Very true. "Dictatorial" is too strong of a word. Most of us did turn Mr. Bogle into a guru. We hung on his every word. He is still constantly quoted to support different arguments. If Mr. Bogle were alive today and issued an updated opinion on % international, % REIT, % foreign government bonds, or "Age-in-bonds," many of us would adjust our portfolios. Will we ever have a similar leader? Who might it be?

I suspect Mr. Bogle mostly had the average-joe-working-man in the front of his thoughts. "Do-it-yourself" can be very intimidating to people with only a high school diploma and no knowledge of Excel spreadsheets. Do we need someone at the helm to ensure we continue to serve this demographic? Mr. Bogle balanced "investor-ability" of the low information investor with the best possible outcome by minimizing complexity. Should we more clearly state novice, intermediate, and expert suggestions in the forum and wiki? Should we offer illustrations of these portfolios with real-world examples to demonstrate the amount of gains or losses we are discussing?
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Re: The future of Boglehead philosophy

Post by nisiprius »

If Mr. Bogle had remained immortal, he could have made dictatorial adjustments to the core principles of his philosophy as circumstances change.
John C. Bogle wasn't the least bit doctrinaire.

There are two identifiable poles in investing philosophy.

1) "embrace simplicity, choose something that is good enough, stay the course, and don't worry about optimizing." This is a minority view, probably because it is not one that the leads to profit for the investment industry.

2) The other is "be nimble and adapt rapidly to the every-changing dynamics of the market, and never settle for anything less than the best."

John C. Bogle wrote his undergraduate senior thesis, "The Economic Role of the Investment Company" [i.e. mutual funds] in 1951. In his published books, it is pretty clear which of those two camps he belonged to.

In 2001, he wrote:
When All Else Fails, Fall Back on Simplicity.
There are an infinite number of strategies worse than this one: Commit, over a period of a few years, half of your assets to a stock index fund and half to a bond index fund. Ignore interim fluctuations in their net asset values. Hold your positions for as long as you live, subject only to infrequent and marginal adjustments as your circumstances change. When there are multiple solutions to a problem, choose the simplest one.
More than once he quoted the old Shaker hymn, "'Tis the gift to be simple, 'tis the gift to be free,/'Tis the gift to come down where you ought to be.'" After fifty years that is where he came down, and I reject the idea that in his experience of far more than fifty years Bogle did not encounter an adequate sample of market conditions to reach an informed conclusion.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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Re: The future of Boglehead philosophy

Post by Sandtrap »

galawdawg wrote: Wed Jun 23, 2021 10:04 am Why should there be any change in Bogleheads investing principles?

After all, the Bogleheads® investment philosophy is:

1. Develop a workable plan
2. Invest early and often
3. Never bear too much or too little risk
4. Diversify
5. Never try to time the market
6. Use index funds when possible
7. Keep costs low
8. Minimize taxes
9. Invest with simplicity
10. Stay the course

And here are some highlights of what Jack Bogle had to say on investing"
Don't look for the needle in the haystack, just buy the haystack!

Diversify, focus on low costs, invest for the long term. Don’t speculate – and don’t be distracted by volatility.

Time is your friend, impulse is your enemy.

Owning the stock market over the long term is a winner's game, but attempting to beat the market is a loser's game.

The greatest enemies of the equity investor are expenses and emotions.

Rely on the ordinary virtues that intelligent, balanced human beings have relied on for centuries...common sense, thrift, realistic expectations, patience and perseverance.

Your success in investing will depend in part on your character and guts, an din part on your ability to realize at the height of ebullience and the depth of despair alike that this too shall pass.

The winning formula for success in investing is owning the entire stock market through an index fund, and then doing nothing. Just stay the course!
Principles are built upon fundamental truths. They are timeless. As a result, they aren't tossed and turned by shifting winds, cultural changes, erroneous teachings or personal preferences. And no, this time is not different! :happy
Great points and well said.

The beauty of the foundation precepts is that they can be applied to many areas of finance which includes broad areas of investing which includes market portfolio investing discussed the most, here. The comprehensive application to financial and retirement portfolio investments, et al, is where the forum excels. It will continue to do so as long as the founding principles stated above do not change or become interpretive.

IMHO
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Brofessor
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Re: The future of Boglehead philosophy

Post by Brofessor »

HootingSloth wrote: Wed Jun 23, 2021 2:01 pm If this is something that will only happen 100 years from now, it seems slightly premature to decide how "we" will address it.
Very premature but I am just curious how we would alter the wiki. Let me offer a few examples. Inverted yield curves in the bond market, zero or even negative interest rates, TIPS replacing bonds, and negative oil futures forcing negative oil prices. If one of these persisted for 100 years or some new unimaginable change occurred in the market, how would we adjust the wiki? We may be at the leading edge of my theoretical 100 year example with one of these. How would we adjust if our boglehead advice resulted in lower than average returns for 20 years? Would enough of us unite and change the wiki? :D
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Re: The future of Boglehead philosophy

Post by alex_686 »

Brofessor wrote: Wed Jun 23, 2021 1:47 pm Thanks for the replies. I am proposing we push the limits of our imagination and imagine 100 years or more of a bull run in a certain sector and investors beating the market for 100 years in that sector.
To quote Albert Einstein, “Make things as simple as possible but no simpler.”

I do have some issues with the Boglehead philosophy. To keep things simple for the layperson, there is a tendency to oversimply things, and thus gloss over critical points. This is a example.

Rather, I would point to Financial Theory and its subset Passive Investing, which unlike Bogleheads, the theory and application is rigorous. One of the key foundational blocks is the Efficient Market Hypothesis. In order for the above scenario to happen the markets would have to becoming significantly inefficient.

I am struggling to think of a combination of government regulation (monopolies), tax policy, and illiquidity could make this happen. Maybe the manorial estates granted by the crown? That is the only thing that I can think of.

On a more general note, while I have specific narrow issues with Bogle, I am in general agreement. I can see technology greatly transforming certain technical aspects, but not the trust.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
HootingSloth
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Re: The future of Boglehead philosophy

Post by HootingSloth »

Brofessor wrote: Wed Jun 23, 2021 2:32 pm
HootingSloth wrote: Wed Jun 23, 2021 2:01 pm If this is something that will only happen 100 years from now, it seems slightly premature to decide how "we" will address it.
Very premature but I am just curious how we would alter the wiki. Let me offer a few examples. Inverted yield curves in the bond market, zero or even negative interest rates, and negative oil futures forcing negative oil prices. If one of these persisted for 100 years or some new unimaginable change occurred in the market, how would we adjust the wiki?
Which of the ten principles listed above do you think would need to be changed if any of those circumstances were to occur?
How would we adjust if our boglehead advice resulted in lower than average returns for 20 years?
Can you expand on what you mean by this? Boglehead advice does not pick a particular portfolio, so does not result in a particular return. To the extent it does favor some portfolios over others, they tend to be precisely the ones that might be described as getting the "average return" and so would not result in "lower than average returns."

If you mean that there will be some portfolio which, in retrospect, outperformed all of the typical Boglehead portfolios over many decades, then that is already the case. For example, a 100% MNST portfolio has outperformed virtually everything that is recommended on here for over 35 years. No one seems to think this means that we need to change any Boglehead principles.
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
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patrick013
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Re: The future of Boglehead philosophy

Post by patrick013 »

I'm like a doubting Thomas, I have to see it to beleive it.
The last 50 years were a growth period. Will the 500 ever
have $100 EPS again ? Have to wait and see.

Growth could turn flat and some big voices think it will.
Sure buy and hold is always obeyed but big growth may not
obey.

Other info can surface. Market weight is great for liquidity
but equal weight can be better for risk and return. Quality
and some dividend funds are sure to have surprises as more
info and history of them surfaces. Have to wait and see.
Don't always believe the first thing you read.

The Intl casino is for a 5% AA IMO. Nothing spectacular
expected there. Aggressive or conservative AA overall is the
most important choice when looking at a 2 fund portfolio
with the usual index replacement.
age in bonds, buy-and-hold, 10 year business cycle
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Re: The future of Boglehead philosophy

Post by Gaston »

I’m not sure what the next evolution in Boglehead thinking will be, but Mr. Bogle did comment on some current trends we are seeing.

1. He was against factor investing. He saw it as a fad that a) generated no superior returns to the long-term investor, and b) introduces behavioral risk by inducing people to jump into and out of funds.

2. Related to #1, he tended to disparage tilts of any kind, seeing tilts as attempts at market timing. He did acknowledge that a few tilts made sense, such as moving to tax-exempt bonds if you are in a high tax bracket. But that was more a tax thing, not an investment thing.

3. Re indexing, he favored TIFs (traditional index funds) over ETFs, again arguing that the intra-day pricing of the latter introduces another behavioral risk, the temptation to trade.

4. Once in a while he was ok with people allocating some money to international, but he was, at best, only a reluctant supporter of this strategy.

I would guess that many of us, including me, are not pure Bogleheads, as we violate one or more of the above items. I have allocated some money to international, for example, but so far have resisted the temptation to jump into factor investing.

If you want to hear Mr. Bogle talk about these topics, listen to episode #1 of Rick Ferri’s Bogleheads podcast.

To answer another question from the OP’s list, I view Rick as the 3rd generation spokesperson of the Bogleheads. Larimore was 2nd gen.
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Re: The future of Boglehead philosophy

Post by Fallible »

Brofessor wrote: Wed Jun 23, 2021 1:57 pm ...
If I recall correctly, in a YouTube video Mr. Bogle even stated he was a Marxist. He seemed serious. It might have just been an economy of language or an expression. However, I do see a sort of co-op theme and democratic theme in his words and actions.

I am curious as to who might be our next Mr. Bogle. Someone who turns down millions has bona fides. We could trust that person. Who would we make a bobble head of in the future?
Can you link to the YouTube video where he makes this Marxist statement? You say he called himself a Marxist, but then you seem to back off on it. Just curious.

As for the "next Mr. Bogle," this has been taken up before on the forum. One example:

viewtopic.php?t=161255
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: The future of Boglehead philosophy

Post by Broken Man 1999 »

While I have great respect for Mr Bogle, many of the Boglehead Principles were practiced by folks long before Bogleheads even existed.

With the exception of buying index funds, my father was certainly a Boglehead, though he didn't have the ability to even buy index funds, as none were available.

He used dividend-paying stocks, diversified over several utilities, as did so many other seniors at the time. He bought stocks one time, and still held them at his death at age 91.

Mr Bogle certainly changed things for the better via index funds. Nothing can ever change his contributions to the little guy to receive a better opportunity to invest.

Broken Man1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
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Brofessor
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Re: The future of Boglehead philosophy

Post by Brofessor »

HootingSloth wrote: Wed Jun 23, 2021 2:46 pm
Which of the ten principles listed above do you think would need to be changed if any of those circumstances were to occur?

Can you expand on what you mean by this? Boglehead advice does not pick a particular portfolio, so does not result in a particular return. To the extent it does favor some portfolios over others, they tend to be precisely the ones that might be described as getting the "average return" and so would not result in "lower than average returns."

If you mean that there will be some portfolio which, in retrospect, outperformed all of the typical Boglehead portfolios over many decades, then that is already the case. For example, a 100% MNST portfolio has outperformed virtually everything that is recommended on here for over 35 years. No one seems to think this means that we need to change any Boglehead principles.
Good point. My examples would not require any changes in the ten principles. Rather, I am attempting to spur our imaginations and consider how this forum or wiki would adapt to similar systemic changes we can not currently imagine. The known knowns, the known unknowns, and the unknown unknowns Lol! :D

I appreciate your feedback. You are correct. The boglehead philosophy does not pick a portfolio, but I hope we can agree there is an informal endorsement of the 3 fund portfolio. We also claim Mr. Bogle is not our leader, but he was an informal unofficial leader. He was the rare individual who relinquishes power and control. It is a wee bit unfair to suggest a 100% MNST portfolio is a "portfolio" for the purpose of this discussion. However, I see your point and there may be "portfolios" which beat the 3 fund portfolio. We assume there will be a reversion to the mean and the 3 fund portfolio will average out with the "winning portfolios" eventually. The purpose of my original post is to question what if the 3 fund portfolio achieves below average returns for a long period of time. How would we adjust? For how long would we "stay the course?" :wink:
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Brofessor
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Re: The future of Boglehead philosophy

Post by Brofessor »

Fallible wrote: Wed Jun 23, 2021 3:00 pm Can you link to the YouTube video where he makes this Marxist statement? You say he called himself a Marxist, but then you seem to back off on it. Just curious.
I will try. It was several years back and the video was from several years back. In my mind's eye he was at a casual panel or even in a living room by a fireplace. I assume it was at a Boglehead conference. That is my recollection if anyone wishes to search for it. I stand by it and I recall him saying it.

I mention it regarding the corporate structure of Vanguard vs Fidelity. I am getting a little of topic. :D
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Re: The future of Boglehead philosophy

Post by LadyGeek »

This thread has run its course and is locked (hypothetical, not actionable). See: Non-actionable (Trolling) Topics
If readers can't do anything with the content of a topic other than argue about it, it does not belong here. Examples include:
  • US or world economic, political, tax, health care and climate policies
  • conspiracy theories of any type
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We are discussing our core investment philosophy but the discussion can not come to an actionable conclusion. Based on past experience, the discussion will soon devolve into contentious disagreements. As shown in the last post, equating Marxism to (Vanguard vs. Fidelity) corporate structure is a start down this path.
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