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:
- Guess the closing price of the S&P 500 Price Index on December 31 of the year in question.
- Only one guess (no percentages) is allowed.
- Registration closes on midnight January 10 of the given year.
- In event of ties, the first guess wins.
At the conclusion of the entry period, the contest included 645 prognostications. On average, the Bogleheads predict an implied 4.26% return for the S&P 500 index in 2019; the Wall Street experts predict an implied 20.78% return. The 16.51% difference between the two groups’ predictions is the largest spread in contest history. As a point of reference, the S&P price index closed at 2506.85 at 2018 year end.
Boglehead Contest Summary Statistics
|Summary||Bogleheads||Wall Street Experts|
|Number of entries||632||13|
As the chart below indicates, the majority of predictions for 2019 performance are bullish.
The next two charts show a historical view of participant sentiment.