The 2017 Boglehead Contest

The 2017 Boglehead Contest was announced in a January 1, 2017  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 647 prognostications. On average, the Bogleheads predict an implied 2.88% 2017 return for the S&P 500 index; the Wall Street experts predict an implied 5.38% return.

Boglehead Contest Summary Statistics

Summary Bogleheads Wall Street Experts
Number of entries 636 11
Average guess 2303.26 2359.18

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

2017predictions

Chart courtesy of surfer1

This year’s predictions continue the tendency of participants, both amateur Bogleheads and Wall Street “experts”, to make, on average, bullish market predictions. The two charts below provide historical data on bull and bear predictions (click image to enlarge).

 

Addendum: Winning entry and final statistics

The S&P 500 Price Index closed at 2673.61 at year-end. The winning guess for the year was made by forum member Bruce, who prognosticated a close of 2676.10, only 2.49 points over the actual close.

The price index returned 19.42% in 2017; the experts implied 5.38% return was slightly more accurate than the Bogleheads implied 2.88% return.

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

2017 Final statistics

Summary Bogleheads Wall Street Experts
Difference 370.35 314.43

 

 

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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