Bogleheads' Guide to the Three-Fund Portfolio

TAYLOR LARIMORE is a sage on the Boglehead forums for everyone who wants to discover “the Boglehead way.” Crowned the “King of the Bogleheads” by Jack Bogle, he has spent more than seven decades in finance and investing, in such positions as revenue officer for the IRS, chief of the Financial Division for the Small Business Administration in South Florida, and a director of the Dade County Housing Finance Authority. He is co-author of The Bogleheads’ Guide to Investing and The Bogleheads’ Guide to Retirement Planning.

• Foreword by John C. Bogle xiPreface: the History of the Bogleheads’ Three-fund Portfolio xviiAcknowledgments xxvChapter 1 The Investment Industry 1Chapter 2 John C. Bogle—The Investor’s Best Friend 5Chapter 3 John Bogle Introduces Three Total MarketIndex Funds 9Chapter 4 Twenty Benefits of Total Market Index Funds (In No Particular Order) 13Benefit 1: No Advisor Risk 14Benefit 2: No Asset Bloat 17Benefit 3: No Index Front Running 19Benefit 4: No Fund Manager Risk 20Benefit 5: No Individual Stock Risk 22Benefit 6: No Overlap 24Benefit 8: No Style Drift 26Benefit 9: Low Tracking Error 27Benefit 10: Above-Average Return 28Benefit 11: Simplified Contributions and Withdrawals 32Benefit 12: The Benefit of Consistency 33Benefit 13: Low Turnover 34Benefit 14: Low Costs 35Benefit 15: Maximum Diversification (lower risk) 38Benefit 16: Portfolio Efficiency (best risk/return ratio) 39Benefit 17: Low Maintenance 40Benefit 18: Easy to Rebalance 41Benefit 19: Tax Efficiency 42Benefit 20: Simplicity (for investors, caregivers, and heirs) 44Chapter 5 Getting Started 49Chapter 6 Stay the Course 59Appendix I: What Experts S Ay 63Appendix II: Meet the Bogleheads 69Glossary of Financial Terms 75Index 79