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The Bogleheads’ Guide to the Three-Fund Portfolio

📅 2019-Feb-24 ⬩ ✍️ Ashwin Nanjappa ⬩ 🏷️ book ⬩ 📚 Archive

The Bogleheads’ Guide to the Three-Fund Portfolio

Last year, for the first time in my life I bought stocks. Not directly, but through index funds. First I had to pick funds for my 401K. And separately I bought an index fund tracking the S&P 500. My timing was so perfect that I had bought on the index’s highest ever day and it nosedived immediately after reducing my investment! I decided that I needed to learn more about stocks and mutual funds before I invest again. Being a person who hates reading or doing anything financial, I searched a lot and finally picked the most straightforward book possible: The Bogleheads’ Guide to the Three-Fund Portfolio. The book literally tells you which 3 funds to invest in. It cannot get simpler than this!

The Bogleheads are fans of Jack Bogle, the inventor of index funds and the creator of Vanguard. They have a more popular, more indepth book called The Bogleheads’ Guide to Investing. This three-fund one is an ofshoot of that book for the laziest investor. The three funds the book recommends are all total market funds: US stock market, international stock market and US bond market. The percent of bonds is suggested to be your age. That is, a 30-year old should have 30% of investments in bonds. A large number of quite-convincing arguments are laid out to tell you why total market funds are the bees’ knees. The book also reminds you how to stay the course in a bull and a bear market.

This thin book is quite light, and can be finished in a few hours. What I found quite off-putting were hundreds of Bogleheads’ blurbs that litter every single page and there are chapters at the beginning and the end that are just blurbs. It is obvious that this is just a blogpost masquerading as a book, just because there is a market for such a book. (And a market there indeed is, look at me.) I just wish they had accepted that, cut out all the blurbs and reduced the book to its true size: about 50 pages. I guess today’s publishers no longer sell thin books. Everything has to be big and thick and should stand out in a book store. Only in books from my parents’ and grandparents’ era have I see 30, 50 or 100-ish page books. Apart from this irritation, the book satisfied its objectives, telling me what to invest in. I think I might need to read one more-substantial book in the future to understand the stock investments better.

Rating: 3/4 (★★★☆)

© 2022 Ashwin Nanjappa • All writing under CC BY-SA license • 🐘📧