The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns

Front Cover
John Wiley & Sons, May 21, 2010 - Business & Economics - 240 pages
14 Reviews
Reviews aren't verified, but Google checks for and removes fake content when it's identified

“There are a few investment managers, of course, who are very good – though in the short run, it’s difficult to determine whether a great record is due to luck or talent. Most advisors, however, are far better at generating high fees than they are at generating high returns. In truth, their core competence is salesmanship. Rather than listen to their siren songs, investors – large and small – should instead read Jack Bogle’s The Little Book of Common Sense Investing.” – Warren Buffett, Chairman of Berkshire Hathaway, 2014 Annual Shareholder Letter.

Investing is all about common sense. Owning a diversified portfolio of stocks and holding it for the long term is a winner’s game. Trying to beat the stock market is theoretically a zero-sum game (for every winner, there must be a loser), but after the substantial costs of investing are deducted, it becomes a loser’s game. Common sense tells us—and history confirms—that the simplest and most efficient investment strategy is to buy and hold all of the nation’s publicly held businesses at very low cost. The classic index fund that owns this market portfolio is the only investment that guarantees you with your fair share of stock market returns.

To learn how to make index investing work for you, there’s no better mentor than legendary mutual fund industry veteran John C. Bogle. Over the course of his long career, Bogle—founder of the Vanguard Group and creator of the world’s first index mutual fund—has relied primarily on index investing to help Vanguard’s clients build substantial wealth. Now, with The Little Book of Common Sense Investing, he wants to help you do the same.

Filled with in-depth insights and practical advice, The Little Book of Common Sense Investing will show you how to incorporate this proven investment strategy into your portfolio. It will also change the very way you think about investing. Successful investing is not easy. (It requires discipline and patience.) But it is simple. For it’s all about common sense.

With The Little Book of Common Sense Investing as your guide, you’ll discover how to make investing a winner’s game:

  • Why business reality—dividend yields and earnings growth—is more important than market expectations
  • How to overcome the powerful impact of investment costs, taxes, and inflation
  • How the magic of compounding returns is overwhelmed by the tyranny of compounding costs
  • What expert investors and brilliant academics—from Warren Buffett and Benjamin Graham to Paul Samuelson and Burton Malkiel—have to say about index investing
  • And much more

You’ll also find warnings about investment fads and fashions, including the recent stampede into exchange traded funds and the rise of indexing gimmickry. The real formula for investment success is to own the entire market, while significantly minimizing the costs of financial intermediation. That’s what index investing is all about. And that’s what this book is all about.

 

What people are saying - Write a review

User ratings

5 stars
6
4 stars
5
3 stars
3
2 stars
0
1 star
0

Reviews aren't verified, but Google checks for and removes fake content when it's identified

LibraryThing Review

User Review  - OccassionalRead - LibraryThing

This is the first of several books on investing that I plan to read to better educate myself and take greater personal control of my finances. If John Bogle had his way, it would probably be my last ... Read full review

LibraryThing Review

User Review  - Daniel.Estes - LibraryThing

Reading this book is like eating a plate of vegetables—your (financial) health will benefit for years to come if you commit to it, but the journey getting there is going to be a boring one. That ... Read full review

Contents

Chapter One A Parable
Chapter Three Cast Your Lot with Business
Chapter Four How Most Investors Turn a Winners Game into a Losers
Chapter Five The Grand Illusion
Chapter Six Taxes Are Costs
Chapter Seven When the Good Times No Longer Roll
Chapter Nine Yesterdays Winners Tomorrows Losers
Chapter Eleven Focus on the LowestCost Funds
Chapter Thirteen Bond Funds and Money Market Funds
Chapter Fifteen The Exchange Traded Fund
Chapter Sixteen What Would Benjamin Graham Have Thought about
Chapter Eighteen What Should I Do Now?
Copyright

Other editions - View all

Common terms and phrases

About the author (2010)

JOHN C. BOGLE is founder of the Vanguard Group, Inc., and President of its Bogle Financial Markets Research Center. He created Vanguard in 1974 and served as chairman and chief executive officer until 1996 and senior chairman until 2000. In 1999, Fortune magazine named Mr. Bogle as one of the four "Investment Giants" of the twentieth century; in 2004, Time named him one of the world's 100 most powerful and influential people, and Institutional Investor presented him with its Lifetime Achievement Award.

Bibliographic information