With 655 ratings
By: John C. Bogle
Purchased At: $24.95
The best-selling investing "bible" offers new information, new insights, and new perspectives
The Little Book of Common Sense Investing is the classic guide to getting smart about the market. Legendary mutual fund pioneer John C. Bogle reveals his key to getting more out of investing: low-cost index funds. Bogle describes the simplest and most effective investment strategy for building wealth over the long term: buy and hold, at very low cost, a mutual fund that tracks a broad stock market Index such as the S&P 500.
While the stock market has tumbled and then soared since the first edition of The Little Book of Common Sense Investing was published in April 2007, Bogle's investment principles have endured and served investors well. This tenth anniversary edition includes updated data and new information but maintains the same long-term perspective as in its predecessor. Bogle has also added two new chapters designed to provide further guidance to investors: one on asset allocation, the other on retirement investing.
A portfolio focused on index funds is the only investment that effectively guarantees your fair share of stock market returns. This strategy is favored by Warren Buffett, who said this about Bogle: "For decades, Jack has urged investors to invest in ultra-low-cost index funds.... Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me."
Bogle shows you how to make index investing work for you and help you achieve your financial goals and finds support from some of the world's best financial minds: not only Warren Buffett but Benjamin Graham, Paul Samuelson, Burton Malkiel, Yale's David Swensen, Cliff Asness of AQR, and many others.
This new edition of The Little Book of Common Sense Investing offers you the same solid strategy as its predecessor for building your financial future.
- Build a broadly diversified, low-cost portfolio without the risks of individual stocks, manager selection, or sector rotation.
- Forget the fads and marketing hype, and focus on what works in the real world.
- Understand that stock returns are generated by three sources (dividend yield, earnings growth, and change in market valuation) in order to establish rational expectations for stock returns over the coming decade.
- Recognize that in the long run, business reality trumps market expectations.
- Learn how to harness the magic of compounding returns while avoiding the tyranny of compounding costs.
While index investing allows you to sit back and let the market do the work for you, too many investors trade frantically, turning a winner's game into a loser's game. The Little Book of Common Sense Investing is a solid guidebook to your financial future.
An absolute waste of money.
When I finished the book I liquidated a stock that pays a decent dividend but seems to have little growth potential, and a mutual fund that has excessive costs that I had overlooked. I put the money in a low-cost S&P 500 index fund that already made up a significant part of my portfolio.
I agree with other reviewers who have criticized the book as repetitive, but it's worth reading for its style, wit, and clarity.
It makes a really compelling argument for investing using an index fund and saving time and energy for other things you may enjoy more than researching companies, etc.
Over the long terms:
- Costs compound badly
- Active investors on average fail to produce good results because of the costs of trading and CGT (Capital Gain Taxes) expenses
- By buying an index you reduce the emotional stress and you'd be less likely of panic or get greedy
For some reason I still think the book is missing something in terms of preparing the reader for the frequent and normal up and down of the markets.
I only wish I had found it lots of years ago.
Putting it simply the author guides an investor to the sort of products that spread risk, deliver results, and charge low ongoing fees. It particularly warning about some of the costs once they are compounded.
Then 12 chapters on the details of that.
Still glad to have read it.
It has many nuggets of interesting information and wisdom, is a small book and a recommended read, I will surely read it again.
His approach is simple, direct and effective. It's a little bit repetitive, but the concepts are sound.
Wish I had read it when I was younger.
At time I thought the book was biased towards selling his own products.
I would have preferred a soft cover.