The Bogleheads’ Guide To Investing By Taylor Larimore et al Review

The Bogleheads’ Guide to Investing by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf is the flagship book of the Bogleheads’ series (the other being The Bogleheads’ Guide to Retirement Planning, which appears to currently be out of print).  First, let it be said all three authors seriously know their stuff.  What’s, they regularly and generously share their wisdom over at the Bogleheads forum.  If you ask a question there, it’s a safe bet you will get some good advice from the authors personally.  Kudos.

Introducing Jack Bogle

The Bogleheads’ Guide to Investing is really the story of John (Jack) C. Bogle, founder of my favorite mutual fund company, Vanguard, and father of indexing (something else I quite enjoy).  Bogle has long been a fierce advocate for the small individual investor, decrying the crippling fees, dishonest sales techniques, and runaway greed so characteristic of the money management industry.

I Am A Boglehead

Not surprisingly, Bogle’s namesake investment group champions low-cost index funds, broad diversification across several different asset classes, and preach simplification (but not, too many asset classes) over complexity.  Sound familiar?  It should, because I am an unabashed Boglehead, as my portfolio attests.

In short, I really, really wanted to love this book.  But I didn’t.  The information contained therein is good stuff, of course, it’s just that it’s not terribly well organized.

Who Is This Book For?

Ordinarily, I ask the above question rhetorically, going on to describe what type of person I think would get the most out of whichever particular book I happen to be reviewing.  Not this time.  I honestly can’t tell who this book is for, myself.

The Bogleheads’ Guide to Investing reads like a book written for beginners.  It explains the how’s and why’s of indexing, why passive investing generally earns higher returns than active management, the basics of behavioral finance, and warns against common beginner mistakes like market timing.  This book was clearly written with beginners in mind, but it often slips up, introducing confusing investment jargon without providing a definition.  I had no trouble following the authors’ line of thought when that happened, but I can just imagine a beginner throwing the book at the wall in disgust, exclaiming “this investing thing is just too complicated for me.”

Thing is, investing isn’t complicated.  I know that.  The authors know that.  But somehow, what the authors know so well and looks so simply in their heads gets jumbled en route to the written page.  All in all, The Bogleheads’ Guide to Investing turns out to be a solid intermediate-level read, which is unfortunate since this book represented a golden opportunity to introduce the simple, elegant effectiveness that is Boglehead philosophy of investing.  Did I walk away convinced that investing is easier than most people believe and that I am fully capable of doing it myself?  Yes, but then again, I already thought that anyway.  I’m not sure I would have been convinced otherwise.

The Bogleheads’ Guide to Investing is an excellent read, no doubt.  It is written in a non-technical, conversational tone sure to appeal to the Johnny Everymans of the world.  But I don’t feel Johnny Everyman will get quite as much out of this book as he could have with better editing and just a bit more detail.  That said, I did walk away from this book having learned something new, which is quite impressive considering how many investment-related books I’ve read in the past 5 years (it’s well over 60).  Still, I can’t help but think The Bogleheads’ Guide to Investing could have been better if only they had defined their audience first.

Buy The Bogleheads’ Guide to Investing from Amazon and make up your own mind. For those who are curious, I recommend The Four Pillars of Investing by William Bernstein and Straight Talk on Investing by former Vanguard chairman Jack Brennan as my beginner investing books of choice.