How Bogleheads Are Keeping Calm, Carrying On Amid Market Turmoil

What You Need to Know

Speakers emphasized investing discipline and asset allocation appropriate for the investor’s life stage.
Also discussed: ways to protect against inflation with TIPS, I bonds and stocks.

The Bogleheads, an investor community devoted to the principles of the Vanguard Group’s late founder, John C. Bogle, apparently have maintained calm by sticking with those ideas through this year’s market turbulence — while also seeking new opportunities.

Group members, who gathered in Chicago last week for their first in-person conference since the pandemic started, appeared steady, according to conference coordinator Christine Benz, Morningstar director of personal finance.

“Everything is down this year but the Bogleheads seem quite at peace. They’re not worrying about which sectors to be in or where to turn for protection against recession,” she told ThinkAdvisor via email on Monday.

“Multiple speakers reinforced the key Bogleheads messages of investing on a disciplined schedule and establishing an asset allocation plan that makes sense given your life stage. And once you’ve done that, you can go about your business!” she added.

The Bogleheads’ investing philosophies include these core ideas, among others, according to their website:

Invest early and often
Stay the course
Live below your means
Don’t take on too much or too little risk
Diversify your portfolio
Use index funds
Keep costs and taxes low
Don’t try to time the market

“Even as most Bogleheads are in ‘stay the course’ mode, one area of opportunity came up in multiple sessions: higher yields and the positive implications for the safe component of investors’ portfolios,” said Benz.

“Allan Roth (Wealth Logic founder) made the comment that investors in search of safety and preservation of purchasing power could build a ladder of TIPS bonds; he noted that real TIPS yields are the most attractive they’ve been in years,” she said, referring to Treasury inflation-protected securities.

Inflation came up in several sessions, which wasn’t surprising given the inflationary pressures people are feeling in their daily lives, Benz noted. “For Bogleheads, the main tools in the toolkit are I bonds, TIPS and stocks,” she said, adding that economist Burton Malkiel “made the point that stocks are a wonderful way to preserve purchasing power in your investment assets.”