Are Bogleheads Passive Investors ?

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Bustoff
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Are Bogleheads Passive Investors ?

Post by Bustoff » Sat May 04, 2013 6:14 am

I have not been on the forum ever since I set up my passive boglehead approach to investing. No need to be. Set it and forget it, right ?

However, something has raised my curiosity.

If the boglehead approach is based on simplicity, passive index investing and accepting market returns, why are the same bogleheads that preach that simplicity here day after day arguing over different ways to beat the market ?

(My question is based on curiosity. It's not a criticism.)

core5
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Re: Are Bogleheads Passive Investors ?

Post by core5 » Sat May 04, 2013 6:32 am

From what I can tell, The vast majority of people posting on here accept that they can't beat the market. However, a lot of the discussions involve getting better returns on your investments by reducing fees and avoiding poor asset allocations, among other things.
Last edited by core5 on Sat May 04, 2013 6:37 am, edited 1 time in total.

YDNAL
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Re: Are Bogleheads Passive Investors ?

Post by YDNAL » Sat May 04, 2013 6:33 am

Bustoff wrote:If the boglehead approach is based on simplicity, passive index investing and accepting market returns, why are the same bogleheads that preach that simplicity here day after day arguing over different ways to beat the market ?
Because simplicity and passive Index investing does NOT translate to "accepting market returns" - implies to invest in Total Markets.

Many here understand and accept academic research showing evidence of risk premia in returns - dealing mostly to HmL (high minus low) and SmB (small minus big) a la Fama/French. Heck, even the Wiki has a page.
Link: http://www.bogleheads.org/wiki/Fama_and ... ctor_Model
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Ed 2
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Re: Are Bogleheads Passive Investors ?

Post by Ed 2 » Sat May 04, 2013 6:43 am

you can argue for or against market timing ,but the chance to buy some extra extra equity like we had 3-4 years ago only blind can miss,now I just dollar cost average every other week to keep my AA according my plan and do not buy that much as I used to buy in 2008-2010.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel

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nisiprius
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Re: Are Bogleheads Passive Investors ?

Post by nisiprius » Sat May 04, 2013 7:45 am

Bustoff wrote:I have not been on the forum ever since I set up my passive boglehead approach to investing. No need to be. Set it and forget it, right ?

However, something has raised my curiosity.

If the boglehead approach is based on simplicity, passive index investing and accepting market returns, why are the same bogleheads that preach that simplicity here day after day arguing over different ways to beat the market ?

(My question is based on curiosity. It's not a criticism.)
First, because Bogleheads are a diverse group, and there isn't any strict creed or doctrine about it. Second, because the phrase "passive investing" isn't terribly well defined. Third, because we might do one thing while intellectually exploring other possibilities, or we might do one thing with most of our money and try something else with a small portion of it.

John C. Bogle himself is not at all doctrinaire, and the essay here on the Boglehead investing philosophy says no more than "use index funds when possible."

Probably the core belief is that once you have decided, for whatever reason, to invest a portion of your portfolio, whatever that portion, into an "asset class"you should do that by using a low-cost index fund or index-y fund. Whether it's a simple index fund like Vanguard Total Stock Market Index, or something more exotic like Schwab Fundamental International Small Company Index, or just index-y like DFA funds, there's all the difference in the world between that and a traditional stock-picking manager's mutual fund.

Once you've decided that index funds are your investing unit, there is plenty of room to argue about allocation, slice-and-dice, Fama-French factors, rebalancing, or even "strategic asset allocation" (adjusting allocation based on long-term changes in macro-economic factors). This is utterly different from what "market timers" do, or piling in and out every year or so depending on the buzz and what's hot, or trying to ride bull markets and dodge bear markets.
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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mhc
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Re: Are Bogleheads Passive Investors ?

Post by mhc » Sat May 04, 2013 9:24 am

I'm here day after day because I enjoy the community. I also want to see if there are any new nuggets I can pick up. Also, this is a forum to disseminate new information.

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Re: Are Bogleheads Passive Investors ?

Post by Sunny Sarkar » Sat May 04, 2013 9:40 am

Bustoff wrote:If the boglehead approach is based on simplicity, passive index investing and accepting market returns, why are the same bogleheads that preach that simplicity here day after day arguing over different ways to beat the market ?
What you are observing is the vocal minority, while the silent majority of Bogleheads simply keep contributing, silently and automatically, to their passive mostly-index fund portfolios and get on with their lives. If you ever come to a Bogleheads reunion and talk to individual Bogleheads about how they go about things, you'll see it.
"Cost matters". "Stay the course". "Press on, regardless". ― John C. Bogle

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