The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns, 10th Anniversary Edition

Posted by jack_miller | Published a year ago

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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.

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Buy an index fund, preferably the S&P 500. That's it. I just saved you $16.
An absolute waste of money.

- rowan_lopez

This book was an awesome read to a new-comer in the scene of investing. I'm not sophisticated in finance. Nor am I wanting to become too knowledgeable in this topic. I just needed to understand the basic to plunge in and invest in an easy, simple portfolio. But doing so takes a whole lot more understanding than just following a simple portfolio recipe. To make my simple portfolio, I dived into Mr Bogle's book. He explained how things work in the finance world, at least enough for me to feel confident about the decisions I'm now making in the finance department. I would recommend this to any beginner investor seeking more knowledge in the field of finance.

- alfred_stewart

Great Book for the basics of investing with a strong focus on Index Funds. I suggest this be read by employees of firms that gave them limited info on their 401K. All the basics are here in this book. I have been invested for 12 years in Index funds. There have been up and downs but overall I am way ahead.

- luna_torres

Good, quick read with great information for anyone who is trying to make sense of personal finance and basic investments. Everyone should read this in their 20s before filling out the paperwork for their first workplace 401K. If you read this one book you'll know enough to invest sensibly for retirement without getting ripped off by financial product salespeople, and you'll understand more about investing than 85% of the general population.

- franco_ramirez

Iconic Jack Bogle dispenses easy to understand, clear and irrefutable investing guidance in this short book. Packed with excellent learnings! My ONLY regret is that I didn’t have/read this book sooner in my life... would doubtlessly have saved me tens of thousands of dollars! Bottom line... READ THIS BOOK, follow Jack’s timeless lessons, then periodically read it again as a reference!

- alaric_sanders

Mr. Bogle makes a solid argument repeatedly, by approaching the same question from multiple directions and supporting it with unimpeachable numbers. It reinforced some views that I had already developed on my own, but also clued me in to the adverse effects over time of high expense ratios and transaction costs.

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.

- gracie_long

Such a great book for a confused investing noob. Got me up to speed in understanding why passive index fund investing is the only worry free long term strategy that consistenly wins, and why active trading always returns to the mean. I finally consolidated my retirement account and opened a vanguard account to move my assets into. Thanks John Bogle!

- cyrus_clark

If you want to know all about stocks and bonds, then this is the book for you. You can’t go wrong. John gives it to you using simple arithmetic showing you what to watch for and how to save money so that you get the most earnings out of your investments. Reading his book is like taking classes in investing as it will fill your head with so much knowledge that people will be asking you for advice. Follow his advice and sit back while your stocks/bonds pay you in dividends and earnings.

- kash_diaz

If you heard about investing (usually a sign we're in a bubble or getting there) and you're thinking of start investing you should start with this book.

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.

- barrett_king

Well, every now and then you choose a real gem of a read that changes your entire perspective on a subject you are pursuing. Having read many investment books over the years, this little book blew me away. Honest, concise, informative and a spring board to further study if you wish (Bogle’s “Common Sense On Mutual Funds” is incredible, but if you don’t desire to read 600pages, this little book gives you the outline and understanding to make more informed choices), this book has greatly enhanced my understanding on stock/ bond investing. Literally as if a veil that had clouded my vision was gradually removed with each page absorbed. Recommended.

- johnny_rivera

Excellent. Cuts out all of the usual jargon & waffle of this type of book, and highlights all of the deceits ( many self inflicted ) of the investment world of the small investor. As somebody once said, “You can’t beat the markets”, but this book tells you how to at least get your fair share, whilst avoiding self delusion and wasted effort. All you need to construct your own balanced investment portfolio.
I only wish I had found it lots of years ago.

- victor_cook

I bought this for my wife as she wanted to get a current understanding of investing. She thinks it is very good and would recommend it.
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.

- hank_roberts

Essentially, keep your investment costs down, and invest early.
Then 12 chapters on the details of that.
Still glad to have read it.

- harley_johnson

I love this concise, easy to read and enjoyable hand book that I can easily carry in my bag to read when ever I can. It is very informative and gets to the point. I have learnt that no matter how much skill you have in trading choosing the right stocks with an objective mind (and a subjective mind) in very important to become a successful trader.

- rhys_kim

I enjoyed reading this book, it is filled with data and it makes the point across clearly; fund managers will eat all your earnings and if you do not pick a low cost fund, it will also leave you shirtless.
It has many nuggets of interesting information and wisdom, is a small book and a recommended read, I will surely read it again.

- kalel_ward

Reads rather too much like an advertorial for the authors low cost market tracking products. He makes a good case but it doesn't feel like an unbiased view.

- carson_chavez

John Bogle did an amazing job of simplifying the investment world.
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.

- nola_hall

A great book, one I wish was about when I was younger. Good advice, but if you are short of time just read the last few chapters. It will certainly help you financially.

- kai_brown

A good book to read if you don't want to be poor in you're old age. So read and be blessed.

- adrianna_kelly

Very informative and can be used as reference, a little biased by the man who invented low cost index funds but a must read for the defensive investor.

- westin_hill

I liked the way it was written as it was easy to digest and provided me with some valuable insights.

At time I thought the book was biased towards selling his own products.

- luciana_ross

Good information.
I would have preferred a soft cover.

- magnus_lee