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The Bogleheads’ Guide to Investing
by Taylor Larimore, Mel Lindauer, Michael LeBoeuf, John C. Bogle (Foreword)

As regular visitors to this blog would know by now, I’m a big fan of mutual fund investing as a means to grow your wealth over the long term. Don’t get me wrong, I enjoy dibble-dabbling directly in the stock market every now and then, but being one who likes to be in control of things, it usually involves hours and hours of research before I click the “Buy” button on the online platform I use. 

That’s why mutual funds are great if you want to start a regular investment plan.

With just a small sum of money, you can “take position” in a diversified portfolio and if this is automated via a standing instruction to your bank, it even cuts out the need to be disciplined about tucking away a little something into your retirement nest egg. Which brings me to my book of the month…

Who are the Bogleheads?

They are a bunch of diehard fans of John C Bogle, the founder of Vanguard, one of the most successful and largest mutual funds (US$841 billion of assets under its management, a close second in size to American Funds, US$843 billion and ahead of Fidelity, US$774 billion) in the US. Started in 1975, the company is the pioneer of index funds. Its value proposition of low low (that’s a double low :)) fees is well known to mutual fund investors all over.

The low fees give Vanguard an edge when it comes to returns. According to a recent article in smartmoney.com, Vanguard’s equity funds have returned 14.48% annualized over the last three years, compared to the company’s two closest rivals, American Funds (14.02%) and Fidelity (13.87%). The average equity fund in America returned 12.43%.

Vanguard’s largest fund, the S&P 500 Index fund has an expense ratio of below 0.20% per annum. Typically we pay around 1.5% and higher for equiy funds in Malaysia. The mutual fund companies in Malaysia definitely ought to take a leaf or two from The Bogleheads’s page, and start to get competitive on fees too.

5 stars – a great guide to getting started on investing in mutual funds. I bought my copy from Amazon. 🙂

Click here for more information or to buy.

Other reviews

“Generically, the Bogleheads are folks who admire John Bogle, founder of the Vanguard mutual fund company . . . So, why did they write this book? Probably for a little ego boost. Also, perhaps, to share a lifetime of accumulated knowledge, to help other people achieve their financial goals, and to leave the world a slightly better place. Are these guys nuts,or what? Anyway, they did a good job. This is definitely a book for beginning investors, but the facts are solid, the advice almost impossible to argue with . . . . If you’re looking for a financial book you can trust, we can’t think of a better candidate than this, except possibly for one of the books by the Master (i.e., John Bogle) himself. If you want to get started investing, if you need a new investment plan, or if you’d like to validate an existing plan, we suggest that you sit down, read this book, and trust what you read. How rare is that?”—Roy Weitz, FundAlarm.com (December 2005)

“The chief Boglehead is Taylor Larimore, 81, a former official at the Small Business Administration . . . He and a few other Vanguard fans started the Diehards forum in 1998. Now Larimore and two other longtime Diehards—Mel Lindauer, 67, a retired owner of a graphic arts business, and Michael LeBoeuf, 63, a former management professor—have written The Bogleheads Guide to Investing . . . . The book’s main themes should come as no surprise. In his own writing, Bogle emphasizes diversification, low costs, and index funds; here, his followers try to make those notions graspable for beginners . . . . Also, unlike most investing authors, the Bogleheads offer advice on topics from taxes to insurance to estate planning .”—Penelope Wang, MoneyMagazine (January 2006).

“The new “Bogleheads Guide to Investing!” Gotcha! A must-read!”- Paul Farrell, Marketwatch.com

“‘The Bogleheads’ Guide’ is both a textbook for beginners and a refresher course for old hands. It blends elements of financial-planning primers like ‘The Wealthy Barber’ with tips on why it pays to be cheap, a la ‘The Millionaire Next Door.’ … The Bogleheads march readers smartly through the basics of how much they need to save for retirement, how to allocate their assets and when to rebalance their portfolios. The authors steer through the minefield of taxes and warn neophytes to master portfolio-gutting emotions including greed and fear.” – James Pressley, Bloomberg.com.

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