Index
- Abelson, Alan, 20
- Acheson, Jeff, 15
- Administrative costs, 34
- Advisor risk, 14–16
- Advisors
- All-market index fund, 10
- Allocation. See Asset allocation
- American Airlines, 19
- American Association of Individual Investors, 63
- Aronson, Ted, xxiii
- Asset allocation
- Bogleheads website investors’ opinions on, xv
- Bogle’s suggestion on non-U.S. stocks and, xiii
- Financial Ramblings blog on, 46–47
- getting started and, 49
- keeping “safe money” in bonds in, 50–51
- Latimore’s suggestion on non-U.S. stocks and, xiii
- maintenance and, 40
- online tool from Vanguard for, 50, 51
- rebalancing and, 41
- tax-efficiency suggestion for, 55
- Asset Allocation Tool, Vanguard, 50, 51
- Asset bloat, 17–18
- Asset size, as predictor of performance, 35
- Bache & Co., xviii
- Balasa, Mark, 63
- Barron’s magazine, 22
- Bear Market, xvii
- Beating the market
- Benchmark indexes, and tracking error, 27
- Beneficiary changes, and maintenance, 40
- Benefits of Three-Fund Portfolio, 13–37
- above-average return, 28–30
- Bogleheads’ testimonials on, 18, 19, 21, 23, 24, 25, 26, 27, 30, 32, 33, 34, 37, 38, 39, 40, 41, 43, 46
- consistency, 33
- ease of rebalance, 41
- low costs, 35–37
- low maintenance, 40
- low tracking error, 27
- low turnover, 34
- maximum diversification (low risk), 38
- no advisor risk, 14–16
- no asset bloat, 17–18
- no fund manager risk, 20–21
- no index front running, 19
- no individual stock risk, 22–23
- no sector risk, 25
- no style drift, 26
- portfolio efficiency (best risk/return ratio), 39
- simplicity, 44–46
- tax efficiency, 42–43
- Benke, Alex, 11
- Benz, Christine, 63
- Berkowitz, Bruce, 20
- Bernstein, William J. “Bill,” xii, xxiii, 4, 15, 63–64
- Bernstein & Co., 30
- Bogle, John C. “Jack,” xi–xv, 5–8, 64
- on all-market index fund, 10
- awards and honors for, 7–8
- Bear Market and recovery of, 50
- Boglehead Investment Philosophy and, xxi–xxii
- Buffett on contributions of, 8
- on costs, 37, 58
- on equity funds going out of business, 20
- first meeting between Larimore and, 6–7
- founding of Vanguard by, 5, 6
- indexing and, xxi
- on international stock allocation 51
- on market timing, xx
- on overvalued stock market, 22
- Quinn on approach of, 6
- retirement from Vanguard by, 7
- Samuelson on index fund invention by, 6
- on simplicity, 44, 45
- on staying the course, 60
- “The Telltale Chart” speech of, xx
- total fund costs (before taxes) study of, 36
- turnover costs rule of thumb guideline of, 34
- Bogle Center for Financial Literacy, 72–73
- Boglehead Investment Philosophy, xxi–xxii
- Bogleheads, 69–73
- Bogleheads’ Guide to Investing, The (Larimore et al.), xii, xv, 6, 16, 35, 72
- Bogleheads’ Guide to Retirement Planning, The (Larimore et al.), xii, 16
- Bogleheads’ Guide to the Three-Fund Portfolio, The (Larimore), xii
- Bogleheads.org website, xi, xii, xv, 44, 57, 70, 71
- Bogle on Mutual Funds (Bogle), xiii, xiv, xxi
- Bogle Research Center, 7
- Bond funds
- Bond Market Index Fund. See Vanguard Total Bond Market Index Fund
- Brokers. See Stock brokers
- Buffett, Warren, xiv, 8, 21, 45
- Bull Markets, staying the course in, 59
- Burns, Scott, xxiii, 64
- Burton, Jonathan, 64
- Buying high and selling low strategy, xxi, 59–60
- Capital gains tax, 26, 34, 54, 57
- Carlson, Ben, 61
- CFA Institute, 36
- “Challenge to Judgment” (Samuelson), 30
- Chartered Financial Analysts Conference (2004), xi
- Clarke, Andrew, 64
- Clements, Jonathan, 28, 31, 58, 64
- Clubs, stock investment, xviii–xx
- Cochrane, John, 64
- College endowments
- Commissions, and turnover costs, 34
- Commonfund Study of Endowments, NACUBO, 61
- Common Sense on Mutual Funds (Bogle), xv, 60
- Company retirement plans
- Conferences and meetings of Bogleheads, xi, 7, 70
- Conflicts of interest, and advisors, 14
- Consistency, 33
- Consumer Financial Protection Bureau, 1
- Consumer Reports Money Book, 64
- Contributions
- Coombs, Christopher, xvii, xviii
- Cost Matters Hypothesis (Bogle), xvi
- Costs, 35–37. See also Fees
- Cramer, Jim, 22
- Damodaran, Aswath, 64
- Democracy in America (Tocqueville), xv
- DeMuth, Phil, 67
- Department of Labor, 15
- Distributions
- Diversification
- Dividend Growth Fund (VDIGX), Vanguard, 18
- Dogu, Laura, 64
- Don’t Count on It (Bogle), 7
- EAFE (Europe, Australasia, and Far East) Index, xi
- Efficiency
- Ellis, Charles, 64
- Endowments. See College endowments
- Energy Fund Admiral Shares, Vanguard (VGELX)
- Equity funds
- Estate and gift tax exemption, 57
- ETFs. See Exchange-traded funds
- Excess return, as predictor of performance, 35
- Exchange-traded funds (ETFs)
- Expected return
- Expected risk
- Expense ratios
- Expenses, and maintenance, 40
- Extended Market Index Fund, 24
- Fairholme Fund, 20
- Fama, Eugene, 65
- Farrell, Paul B., xxiii, 30
- Fees, xiv, xxi, 1
- Ferri, Rick, 1, 11, 29, 65
- Fidelity, 47, 49, 55, 56, 58
- Fidelity Magellan Fund, 17, 20
- Financial Engines, 50
- Financial Ramblings (blog), 46–47
- Financial Research Corporation, 35
- First Index Investment Trust, 20
- Fortune magazine, 8
- Fund managers. See Mutual fund managers
- Gains, impact of costs on, 37
- Garrett Planning Network, 16
- Getting started
- Gift tax exemption, 57
- Goals, and Three-Fund Portfolio, xiii
- Gold Fund, Vanguard, 25
- Graham, Benjamin, 67
- How a Second Grader Beats Wall Street (Roth and Roth), xxiii
- Hulbert, Mark, 2, 65
- Hulbert Financial Digest, 2
- Humble Dollar, The (newsletter), 31
- Impact costs, 34
- Income changes, and maintenance, 40
- Incompetence of advisors, 14
- Index front running, 19
- Index funds. See also Total Stock Market Index Funds; Vanguard Total International Stock Index Fund; Vanguard Total Stock Market Index Fund
- Individual Retirement Accounts (IRAs), 52–54
- International Stock Index Fund. See Vanguard Total International Stock Index Fund
- International stocks
- Investment clubs, xviii–xx
- Investment Company Institute, The, 44
- Investment industry, 1–4
- Investment strategy
- Bernstein’s approach to, 4
- Boglehead Investment Philosophy and, xxi–xxii
- buying high and selling low and, xxi
- individual investors and individual stocks and, xix
- investment clubs and, xviii–xix
- market timing and, xix–xx
- newsletter recommendations and, xix
- past performance and, xix, xx–xxi
- Roth’s “simple, but not simplistic” approach to xxiii–xxiv
- stock brokers and fees and, xxi
- IRAs. See Individual Retirement Accounts
- Jacobs, Sheldon, 65
- John C. Bogle Center for Financial Literacy, 72–73
- John C. Bogle Research Center, 7
- Journal of Portfolio Management, 30
- Kahneman, Daniel, 23
- Kiplinger’s Retirement Report, 65
- Kudlow, Lawrence, 65
- Larimore, Pat, 6, 7
- Larimore, Taylor
- “Lazy Portfolios” (Farrell), xxiii, xxiv, 30
- Legg Mason Value Trust (LMVTX), 2
- Lehman Brothers, 38
- Lindauer, Mel, xii, 7, 22, 69–73
- Lynch, Peter, 20
- Magellan Fund, Fidelity, 17, 20
- Maintenance
- Malkiel, Burton G., xxi, 2, 65
- Manager risk, 20–21
- Managers, fund. See Mutual fund managers
- Market sector risk, 25
- Market timing
- MarketWatch, xxiii
- Markowitz, Harry, 65
- McNabb, Bill, 18
- Meetings and conferences of Bogleheads, xi, 7, 70
- Merrill Lynch, xxi
- Miami Herald Making Money seminar, 2000, 7, 22, 70
- Mike, in Financial Ramblings blog, 46–47
- Miller, Bill, 2, 20, 65
- Mining and Precious Metals Fund, Vanguard, 25
- Money Show, The, Orlando, Florida, 1999, 6
- Monte Carlo simulations, 60
- Moody, E. F., 65
- Morningstar, 42
- Morningstar Mutual Funds, xi, xx
- Morningstar STAR ratings, as predictor of performance, 35
- Motley Fool, 66
- Mutual Benefit Life Insurance Company, xviii
- Mutual Fund Forecaster, The (newsletter), xix
- Mutual fund managers
- Mutual funds
- asset-allocation decision on, 51
- average annual returns on, 34
- complicated contributions and withdrawals in, 32
- cost of taxes in, 36
- costs related to returns in, 35
- impact of costs on gains in, 37
- maintenance from changes in, 40
- overlap of securities in, 24
- predictors of performance of, 35
- style drift with stock changes in, 26
- total fund costs (before taxes) study of, 36
- turnover in, 34
- underperforming by, 20
- NACUBO–Commonfund Study of Endowments (NCSE), 61
- NASDAQ Index, sector risk in, 25
- National Association of College and University Business Officers (NACUBO), 28–29
- Commonfund Study of Endowments (NCSE) from, 61
- National Association of Personal Financial Advisors, 16
- Net sales, as predictor of performance, 35
- Net-worth changes, and maintenance, 40
- Newsletters, xiv, xviii–xx, 2
- New York Times, 3
- Non-U.S. stocks
- Norstad, John, 39, 66
- Overlap
- Past performance, and stock-picking, xix, xx–xxi
- Performance
- Personal Advisory Service, Vanguard, 16
- Portfolio efficiency, 39
- Prior, Anna, 66
- Qualified Dividend Income (QDI) tax rate, 42
- Quinn, Jane Bryant, 6, 66
- Rebalancing
- Regnier, Pat, 66
- Retirement accounts. See Individual Retirement Accounts
- Retirement plans. See Company retirement plans
- Returns
- above-average, in Three-Fund Portfolio, 28–30
- asset bloat’s impact on, 17–18
- average annual return and worst single-year return (1926–2015) study, 49–50
- college endowments compared with Three-Fund Portfolio for, 61
- consistency in, 33
- costs related to, 35, 37
- fund marketing using, 44
- maximum diversification for low risk, 38
- portfolio efficiency and, 39
- rebalancing and, 41
- studies on, 28–30
- tax efficiency and, 43
- tracking error and, 27
- turnover rates and bad market timing and, 34
- Reversion to the mean, 20, 25
- Risk
- Risk/return ratio, and portfolio efficiency, 39
- Risk tolerance, xiii
- Ross, Ron, 66
- Roth, Allan, xxiii, xxiv, 29, 66
- Roth, Kevin, xxiii
- Roth Individual Retirement Accounts (IRAs)
- Sales charges, in fund costs comparison, 36
- Samuelson, Paul, xiv, 5, 30, 66
- S&P Dow Jones SPIVA Scorecard, 28
- S&P 500 Index Funds, 24
- Sanford C. Bernstein & Co., 30
- Sauter, Gus, xii
- Schultheis, Bill, xxiii, 44, 66
- Schwab, 47, 49, 55, 56, 58
- Second Grader Portfolio, xxiii, 30
- Sector risk, 25
- Securities and Exchange Commission, 16
- Sengupta, Chandan, 66
- Sharpe, William “Bill,” xiv, 29–30, 50
- Sharpe Ratio, as predictor of performance, 35
- Siegel, Jeremy, 66
- Simplicity
- Solin, Dan, 67
- Spitz, William, 67
- SPIVA Scorecard, 28
- Spreads, and turnover costs, 34
- Statman, Meir, 66
- “Stay the course” mantra, xv, 59–61
- Stock/bond ratio
- Stock brokers, xiv, xviii–xx
- Stock investment clubs, xviii–xx
- Stock Market Index Fund. See Vanguard Total Stock Market Index Fund
- Stock-picking
- buying high and selling low in, xxi
- individual investors and individual stocks and, xvii
- individual stock risk and, 22–23
- investment clubs and, xviii–xix
- “Jim Cramer’s Top Stock Picks” example of, 22
- manager risk and, 20–21
- market timing and, xix–xx
- newsletter recommendations on, xix
- past performance and, xix, xx–xxi
- stock brokers and fees and, xxi
- Stock tips, risk from, 22–23
- Stovall, Robert, 67
- Style drift, 26
- Swensen, David, xiv, xix, xxiii, 18
- Target Retirement Funds, 52
- Taxable accounts
- Taxable bond funds, versus tax-exempt, 54–55
- Tax-advantaged accounts
- Tax cost ratio, 42
- Tax efficiency
- Taxes
- Tax-Equivalent Yield Calculator, Morningstar, 55
- Tax-exempt bond funds, 54, 55
- Tax-Exempt Intermediate-Term Bond Fund (VWIUX), Vanguard, 54
- Tax rates
- Technology funds, 25
- “Telltale Chart, The” (Bogle), xx
- Tenure of managers, as predictor of performance, 35
- Teresa, Peter D., 67
- Three-Fund Portfolio
- above-average return in, 28–30
- asset-allocation decision for, 49–51
- asset bloat avoided in, 18
- benefits of, 13–37. See also Benefits of Three-Fund Portfolio
- Bogleheads’ testimonials on, xxii, 3, 8, 11, 18, 19, 21, 23, 24, 25, 26, 27, 30, 32, 33, 34, 37, 38, 39, 40, 41, 43, 46, 57, 60
- Bogle’s introduction of, 9–10
- college endowment returns compared with, 61
- costs kept low in, 36–37
- deciding on funds for, 49
- diversification with lower risk as hallmark of, xii, 38
- efficiency of, 39
- expense ratio comparison for, 36
- experts on, 63–67
- factors in initial allocation into, xiii
- Ferri/Benke study on returns of, 11
- Financial Ramblings blog on, 46–47
- funds in, xii, xvii, 49–51. See also Vanguard Total Bond Market Index Fund; Vanguard Total International Stock Index Fund; Vanguard Total Stock Market Index Fund
- getting started steps in, 49–58
- history of, xvii–xxiv
- implementation of plan in, 55–56
- index front running not a factor in, 19
- individual stock risk not seen in, 22–23
- Larimore’s idea behind, xii–xiii
- maintenance kept to minimum in, 40
- manager risk missing from, 21
- maximum diversification for low risk in, 38
- need for advisors reduced by using, 16
- overlap of securities not seen in, 24
- overview of, xii–xiii
- rebalancing ease in, 41
- sector risk not seen in, 25
- selecting fund company for, 55–56
- simplicity of, 44–46
- simplified contributions and withdrawals in, 32
- style drift not seen in, 26
- tax efficiency of, 42–43
- tracking error minimized in, 27
- turnover rates comparison for, 34
- Thrift Savings Plan, 47
- Thune, Kent, 67
- TIAA-CREF, 47
- Time magazine, 7–8
- Tocqueville, Alexis de, xv
- Total Bond Market Index Fund. See also Vanguard Total Bond Market Index Fund
- Total International Stock Index Fund. See also Vanguard Total International Stock Index Fund
- Total Market Index Funds
- Total Stock Market Index Funds. See also Vanguard Total Stock Market Index Fund
- Total US stock market (TSM), efficiency of, 39
- Tracking error, 27
- Traditional Individual Retirement Accounts (IRAs)
- Transaction costs, in fund costs comparison, 36
- Turnover, 34
- Turnover costs
- Tversky, Amos, 23
- United Founders Corporation, xvii, xviii
- United States Consumer Financial Protection Bureau, 1
- U.S. Department of Labor, 15
- U.S. Securities and Exchange Commission, 16
- Updegrave, Walter, 67
- Vanguard
- Asset Allocation Tool from, 50, 51
- Bogle’s founding of, as investor owned, 5, 6
- Bogle’s retirement from, 7
- closing of funds by, 17–18
- contact information for, 56
- index funds and size of, 3
- Financial Ramblings blog on index funds from, 47
- performance of funds of, 5
- size of, 6
- starting a Three-Fund Portfolio and, 55, 56, 58
- total market index funds from, 49, 55
- Vanguard Diehards, 70. See also Bogleheads
- Vanguard Dividend Growth Fund (VDIGX), 18
- Vanguard Energy Fund Admiral Shares (VGELX), 33
- Vanguard exchange-traded funds (ETFs), asset-allocation decision on, 51
- Vanguard Gold Fund, 25
- Vanguard Mining and Precious Metals Fund, 25
- Vanguard Personal Advisory Service, 16
- Vanguard Tax-Exempt Intermediate-Term Bond Fund (VWIUX), 54
- Vanguard Total Bond Market Index Fund Investor Shares (VBMFX)
- Vanguard Total International Stock Index Fund Investor Shares (VGTSX)
- Bear Market and recovery of, 50
- Bogle’s introduction of, 10
- costs kept low in, 36
- expense ratio comparison for, 36
- Latimore’s suggestion on allocation into, xiii
- Qualified Dividend Income (QDI) tax rate for, 42
- tax-advantaged accounts and tax efficiency of, 54
- Three-Fund Portfolio with, xii
- tracking error minimized in, 27
- turnover rates comparison for, 34
- Vanguard Total International Stock Market Index Fund (VTIAX), and asset allocation, 51
- Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)
- Bear Market and recovery of, 50
- Bogle’s introduction of, 10
- consistency of, 33
- costs kept low in, 36
- expense ratio comparison for, 36
- Qualified Dividend Income (QDI) tax rate for, 42
- tax cost ratio of, 42
- tax-advantaged accounts and tax efficiency of, 54
- Three-Fund Portfolio with, xii
- tracking error minimized in, 27
- turnover rates comparison for, 34
- Volatility, as predictor of performance, 35
- Wilshire Associates, 67
- Winton Capital Management Ltd., 19
- Withdrawals
- Young investors, portfolio for, xxiii
- Zweig, Jason, xx, 67
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