The 2016 Boglehead Contest

The 2016 Boglehead Contest was announced in a January 1, 2016  Bogleheads Forum topic post .

The Boglehead Contest is an annual event that takes place on the Bogleheads forum where members take guesses to forecast the closing price of the S&P 500 Price Index at year end. Keep in mind that the Price Index is simply a measure of market price and does not take into account stock dividends or the reinvestment of dividends. Thus, the Price Index does not represent the total return for an investment in an S&P 500 index fund.

The contest also includes forecast predictions from “expert” Wall Street firms, and the comparison between the amateur and expert camps is considered a fun distraction looking at the potential follies of making predictions.

The rules of the contest are simple:

  1. Guess the closing price of the S&P 500 Price Index on December 31 of the year in question.
  2. Only one guess (no percentages) is allowed.
  3. Registration closes on midnight January 10 of the given year.
  4. In event of ties, the first guess wins.

Contest statistics

At the conclusion of the entry period, the contest included 610 prognostications. On average, the Bogleheads predict an implied 3.14% 2016 return for the S&P 500 index; the Wall Street experts predict an implied 7.27% return.

Boglehead Contest Summary Statistics

Summary Bogleheads Wall Street Experts
Number of entries 600 10
Average guess 2108.05 2192.50

The distribution of the final entries can be seen in this chart.

2016Boglheadchart

Chart courtesy of surfer1

This year’s Bogleheads predictions, are on average, bullish, as the following charts indicate (click images to enlarge).

Addendum: Winning entry and final statistics

The S&P 500 Price Index closed at 2238.83 at year-end. The winning guess for the year was made by forum member  Roverdog, who prognosticated a close of 2238.69,  a scant 0.06 point below the actual close.

The price index returned 9.54% in 2017; the experts average implied 7.27% return was more accurate than the Bogleheads average implied 3.14% return.

In terms of the average guess, the Wall Street experts outguessed the average Boglehead guess, as indicated in the summary chart below.

2016 Final statistics

Summary Bogleheads Wall Street Experts
Difference 130.78 46.33

 

About

Barry Barnitz, administrator of both the Bogleheads® wiki and of Financial Page, a Bogleheads® blog. In addition I serve as an administrator of finiki, the Canadian financial wiki, and as an administrator of the John C. Bogle Center for Financial Literacy site.

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