I hadn’t realized until recently that I was a bona fide Boglehead, even though I followed the man and his investment philosophy. A Bogle bobblehead sits on my bookshelf like a talisman — a giveaway for the book, “The Bogleheads’ Guide to Investing.”
I can’t help but think of Bogle and Bogleheads as I read news reports on the trial of Sam Bankman-Fried, who is accused of bilking customers and investors out of billions of dollars following the 2022 collapse of his cryptocurrency exchange, FTX.
Bankman-Fried was one of the most prolific promoters of cryptocurrency, which appeals to investors who want to rush to richness. They thrive on pumping up the risk, investing in speculative stuff like crypto in the frothy pursuit of high rewards.
Bogle “was a contrarian who took on Wall Street and the investment community through his advocacy of the cost-efficient index fund, which was widely ridiculed by stock pickers but came to dominate the investing world,” one of my former colleagues wrote in 2019, after Bogle’s death at 89.
Bogle frequently pointed out that only a small percentage of individual stock-pickers can beat the S&P 500 — one of the best gauges of stock market performance — over a long period of time. He believed that index funds meant to mimic the market indexes are a cheaper way to build wealth. He wanted investing to be simple.
A Boglehead is much like the tortoise in the children’s fable, “The Tortoise and the Hare.” As you may recall, the hare mocked the tortoise for his slow and steady approach to racing. The hare bragged about his speed, and was so overconfident in his abilities that he took a nap.
But the tortoise stayed on course, slowly but methodically moving toward the finish line. You know the rest.
I was recently invited, along with my husband and two daughters, to talk about investing as a family at a Bogleheads conference in Maryland sponsored by the John C. Bogle Center for Financial Literacy. Next year, the group will convene in Minneapolis. (In the interest of full disclosure, I own Vanguard mutual funds in my 401(k) plan and other investment portfolios.)
“Jack Bogle believed that every investor, including very small investors, deserves a fair shake and their fair share of the market’s returns,” said Christine Benz, president of the board of the John C. Bogle Center for Financial Literacy.” This conference is all about extending that legacy.”
Bogleheads are committed to helping people understand the importance of investing and having enough.
They believe what Bogle wrote in his book, “Enough: True Measures of Money, Business and Life.”
“Not knowing what enough is subverts our professional values,” Bogle wrote. “It makes salespersons of those who should be fiduciaries of the investments entrusted to them.”
This year, for the first time, conference attendees could either partake in the 101 track, which was focused on investing fundamentals, or an advanced track that covered getting the most out of Social Security, real estate, structuring your retirement portfolio, and Roth conversions.
My children are great savers but reluctant investors, weary of the turbulence in the stock market. They have rebuffed attempts to get them to read investment books and articles.
It took quite a bit of persuasion, but they relented and agreed to talk about how my husband and I have been pushing the Boglehead way.
Can I tell you my heart nearly burst because something finally clicked for our girls, especially our eldest, 28.
During the panel discussions with investing experts, she began texting me. She, along with her sister and my husband, were sitting in a row behind me.
Me: “Treasury Inflation Protected Securities. TIPs are set up to protect you against inflation.”
Me: “Inflation Protection Bonds. They are also meant to keep up with inflation. So the thing with inflation is your money loses value because prices are increasing. If your money doesn’t keep pace with inflation, you don’t have enough to buy things you need and want, like groceries or a car.”
Her: “Small cap medium cap”
Me: “Small cap = small companies that have the potential to grow and, therefore, make an investor more money. Mid-cap = companies that are medium size. At some point, Apple was small cap, then medium size, then HUGE.”
The one-word questions without question marks went on for several more investment terms she heard the speakers mention. While I was answering one query, she asked her dad what something else meant. Her younger sister, 23, leaned in to hear his whispered explanations.
They were listening. They were engaged. They were eager to learn more thanks to the Bogleheads.
My people broke through where I had struggled. They had inspired my children to become better-informed investors, willing to patiently wait to grow their wealth. And to be satisfied with enough.