Bogleheads Guide the Bogleheads\' Guide

Bogleheads Guide

THE BOGLEHEADS' GUIDE to INVESTING

When it comes to investing, whether in stocks, mutual funds, IRA's or Treasury bonds, most people have no idea as to how to get started and perhaps even knows less about what to invest in and how much to devote to their investments in the form of time and money. In today's recessionary economy and as a result of what has transpired on Wall Street and at the large investments firms like AIG in the last several difficult years, a good number of potential investors have become very reluctant to take any risks when it comes to investing their hard-earned dollars into a mutual fund or something similar in nature. In essence, in order to become a wise and profitable investor, one must diligently study the markets and perhaps seek out the advice of a professional investment counselor.

But on the other hand, one can also consult a number of books on the topic, such as the Bogleheads' Guide to Investing by Taylor Larimore, Mel Lindauer and Michael Le Boeuf, published by Wiley Publishing Company in 2006. Although described as a self-help guide, this excellent book, written in simple laymen's terms, is based upon the investment principles of Jack Bogle, the founder and former CEO of the investment management firm Vanguard and seen by many as the "conscience of the mutual fund industry" and "uncompromisingly committed to his founding principles of putting the interest of the investor" ahead of those that operate mutual fund management firms ("The Greatest Investors," 2009, Internet). Overall, the Bogleheads' Guide to Investing is squarely aimed at "investing for the long-term, minimizing the costs and taxes" linked to investing in mutual funds and to investing conservatively ("Review," 2007,

Internet) in today's highly unpredictable economy.

As one of America's most influential and powerful investors, Jack Bogle continues his thirty year-long quest to not only transform the mutual fund industry but also to provide sound investment advice to a whole range of potential investors when it comes to mutual funds, something which Larimore, Lindauer and Le Boeuf cover expertly in their book. As pointed out by Robert Slater in his award-winning expose on the so-called "Vanguard Experiment" of 1996, Bogle's investment strategies in relation to mutual funds advocates "capturing market returns by investing in broad-based index mutual funds" that are no-load, low cost, low turnover and especially passively managed ("The Greatest Investors," 2009, Internet).

To be more concise, Bogle stresses four specific themes related to investing in mutual funds which Larimore, Lindauer and Le Boeuf discuss with great proficiency and professionalism. In order of importance, these themes include focusing upon the primary goal of investing with simplicity, continually attempting to minimize costs and expenses, keeping an eye upon the economics of a long-term investment horizon and maintaining a reliance on "rational analysis and an avoidance of emotions in the investment decision-making process" ("The Greatest Investors," 2009, Internet).

Within the 336 pages of the Bogleheads' Guide to Investing, Larimore, Lindauer and Le Boeuf deftly discuss and analyze virtually every area of Bogle's investment principles and strategies for the common, everyday American investor. For instance, in Part One "Essentials of Successful Investing," the authors explore how important it is for investors to examine very closely their own financial status before taking the proverbial plunge into mutual funds or any other type of investment. Three ways to accomplish this includes altering one's mentality related to living a sound financial lifestyle, calculating one's overall net worth, paying off high interest credit cards and loans and commencing to create an emergency fund which can be used as a back-up source of income (the Bogleheads' Guide, 2006, pg. 4).

Certainly, in order to become a successful and profitable investor in mutual funds, it is of prime importance to start investing as soon as possible, due to the fact that the earlier a person begins, the more compound interest will be accrued over the long haul. In addition, as Bogle so acutely points out, every investor must become a very frugal individual, meaning that one must constantly attempt to cease wasting money on things which bring about no financial advancement and instead invest in mutual funds or other types of entities which over several decades will increase one's net worth and lay the foundation for a solid financial future (the Bogleheads' Guide, 2006, pg. 15).