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.
Records of annual contest entries cover the period from 2003 to 2018, so an analysis of participant performance is possible. As of 2018, no individual winner of the contest has been able to repeat.
Boglehead Contest annual winners
|2011||Triple digit golfer||1257.61||1257.30||0.31|
The table below provides the average guess by each group (bogleheads vs. experts). Over the 2003 – 2017 period, the bogleheads have, on average, come closer to guessing the S&P 500 closing value eight times; the experts seven times. The average point variance from the closing index value has also been rather close: the boglehead difference has averaged 148.48 points; the experts 154.27.
Boglehead Contest average guess
|Year||S&P 500 return||Bogleheads avg. guess
||Experts avg. guess
||Bogleheads difference||Experts difference|
The average guesses allow us to also calculate an implied return guess. The following table (the “winning” average is high-lighted in blue) provides this return forecast data. Note that over this period both bogleheads and experts have, on average, always forecast a bullish positive return.
Boglehead Contest implied S&P 500 Price Index returns
|Year||S&P 500 return||Bogleheads return||Experts return|
This bullish tendency is captured in these charts, which measure individual forecasts (click image to enlarge).
- Boglehead Contest (official site)
- Bogleheads® contests – wiki
- 2018 Boglehead Contest Charts – forum
- 2017 Boglehead Contest Charts – forum
- 2016 Boglehead Contest Charts – forum
- Boglehead Contest (google sheet)