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The Index-Investor Score: the Whole Method
Method index-investor/1.1 · published
The index-investor score compares a portfolio with a well-known, public philosophy: keep costs low, own the whole market through index funds, set an allocation and keep it, trade rarely, keep it simple, and put tax-inefficient holdings where taxes do the least harm. That checklist is inspired by the Bogleheads® investment philosophy. It is free on every plan, and unlike the Moneyta Score, every weight and cut-off is published here. Your score page shows each step with your own numbers, and you can download the whole calculation to check it in a spreadsheet.
The six factors and their weights
| Factor | Weight | What it measures | How it becomes points |
|---|---|---|---|
| Cost | 25% | Your funds' yearly fees (expense ratio plus 12b-1), weighted by how much of your fund money each holds. Counts in proportion to the share of your stock and fund money held in funds. | 0.05% a year or less = 100; 1.00% or more = 0; a straight line between. A fund that reports no fee is left out, never assumed free. Needs fees for 80% of your fund money. |
| Breadth | 20% | 60% of it is the share of your money in index funds; 40% is how many companies stand behind each dollar: a dollar in funds counts the companies inside your funds, a dollar in individual stocks counts the stocks you hold. | Index share 0% = 0, 100% = 100. Companies: 10 or fewer = 0, 1,000 or more = 100, on a log scale between. Needs to know whether 80% of your fund money is indexed. |
| Allocation | 20% | Your bond share against a target: your own saved target if you set one, otherwise the rule of thumb of roughly your age in bonds (from your optional birth year). With neither, this step doesn't apply. | 100 minus 2 points for every percentage point of gap; 50 points away or more = 0. |
| Staying the course | 15% | Sales in the last 12 months as a share of the portfolio. Imports that only opened positions are not sales. | 5% or less = 100; 50% or more = 0. Needs 3 months of history. |
| Simplicity | 10% | How many funds you hold, less a deduction for overlap between them. Counts in proportion to the share of your stock and fund money held in funds. | 1-4 funds = 100, 5-6 = 80, 7-9 = 60, 10-14 = 40, 15+ = 20; overlap takes off up to 30. |
| Tax placement | 10% | Across all your accounts: bonds and REITs held in taxable accounts while tax-advantaged accounts hold stocks that could swap places. | Nothing misplaced = 100; 25% of your household or more = 0. Needs at least one taxable and one tax-advantaged account. |
| Global share | shown only | The share of your stocks based outside the US. | Never scored: the philosophy leaves the split to you. |
When a factor doesn't apply, or lacks data
A factor that doesn't apply (tax placement with a single account, cost when you hold no funds) is skipped, and its weight is spread over the factors that do. A factor whose data falls below its floor is refused rather than guessed. If refused factors would carry more than half the weight of the factors that apply, the whole score says “not enough data yet” instead of showing a number.
Cost and Simplicity are about the funds you hold, so they count in proportion to how much of your stock and fund money is in funds: fully for an all-fund portfolio, a little for a portfolio of individual stocks with a small fund position. Breadth works the same way, crediting each dollar with the companies behind it. A single small fund purchase in a portfolio of individual stocks therefore moves the score a little, not a lot. (Method 1.1; under 1.0 these steps counted in full as soon as you held any fund.)
A worked example
A three-fund portfolio, 60% US total market (0.03% a year), 30% international (0.05%), 10% bonds (0.03%), for a 30-year-old with no saved target. Cost: 0.6 × 0.03% + 0.3 × 0.05% + 0.1 × 0.03% = 0.036%, under the 0.05% line, so 100. Breadth: all index funds, over 12,000 companies, so 100. Allocation: 10% bonds against a rule-of-thumb 30%, so 100 − 2 × 20 = 60. With no sales, one account and three funds, the total is (25 × 100 + 20 × 100 + 20 × 60 + 15 × 100 + 10 × 100) / 90 = 91.1.
The principles it measures
The Bogleheads® investment philosophy, as its community sets it out, comes down to a short list. Each factor above measures one of them, in our words and with our weights:
- Keep costs low: Cost, the fees your funds charge each year.
- Diversify broadly, through index funds: Breadth, how much of your money is in index funds and how many companies you own through them.
- Choose an allocation and keep it: Allocation, your bond share against your own target or the rough age-in-bonds rule.
- Stay the course: Staying the course, how much you sold in the last year.
- Keep it simple: Simplicity, how many funds you hold and how much they overlap.
- Mind taxes: Tax placement, whether bonds and REITs sit in tax-advantaged accounts.
Questions
Is the index-investor score from the Bogleheads® community?
No. It is Moneyta's own score. Its checklist is inspired by the Bogleheads® investment philosophy (low costs, broad index funds, a chosen allocation, few trades, simplicity and tax-aware placement), measured with published weights. Moneyta is not affiliated with or endorsed by the John C. Bogle Center for Financial Literacy.
Is the index-investor score free?
Yes, on every Moneyta plan, with the step-by-step calculation and a downloadable spreadsheet of every input.
What it is not
It is not advice and it does not say what to buy or sell. A portfolio can score low for reasons its owner chose on purpose. It is one lens; the MPT score is another, and Moneyta's Moneyta Score a third.
Sources: the Bogleheads® wiki pages “Bogleheads® investment philosophy”, “Three-fund portfolio”, “Asset allocation” and “Tax-efficient fund placement”, and John C. Bogle's writing. Inspired by the Bogleheads® investment philosophy. Moneyta is not affiliated with or endorsed by the John C. Bogle Center for Financial Literacy.