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The Little Book of Common Sense Investing:…
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The Little Book of Common Sense Investing: The Only Way to Guarantee Your… (original 2007; edition 2017)

by John C. Bogle (Author)

MembersReviewsPopularityAverage ratingMentions
4771037,290 (3.97)5
"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.… (more)
Member:memocan
Title:The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits)
Authors:John C. Bogle (Author)
Info:Wiley (2017), Edition: 2, 304 pages
Collections:Your library
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The Little Book of Common Sense Investing by John C. Bogle (2007)

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Informative basic guide for those who want to focus on efficient long-term investing. John Bogle provides plenty of interesting data and advice concerning index funds, bonds, fund adviser selection, stocks, taxes, and much more. This is a good short introductory read for investing. ( )
  trile1000 | Jul 1, 2018 |
History of Financial Advice Collection. John Bogle is the head of the low-cost mutual fund group Vanguard, one of the earliest and most successful of the mutual funds. Unlike the financial advice given by other fund managers, notably Peter Lynch of the Fidelity Magellan Fund in One Up on Wall Street (1989), Bogle is explicitly and engagingly proselytizing about the role that index funds have in the personal financial investment landscape. The aim of his book, he is clear, is to bring about the “index revolution”: to convince American shareholders that low-cost mutual funds are the only efficient, fair and honest way to ensure a steady return on stock market investments. Bogle’s argument in his introduction is underpinned by three assertions. Firstly, he stresses the importance of the “value investing” models advocated by Benjamin Graham and Warren Buffet, for whom the underlying performance of a company is taken as evidence of its real and future value. Secondly, he distinguishes between this “real market” of value and the “speculative market” of investors’ emotions and perceptions and suggests that the discrepancy between the two produces a volatility that amounts only to a zero-sum game: “for each percentage of extra return above market that one of us earns, another of our fellow investors suffers a return shortfall of precisely the same dimension.” Finally, he makes clear that the costs of buying and selling stocks means that the benefits that do accrue from this churn go only to brokers: in the “casino the house always wins. In horse racing the track always wins” and in the “game of investing, the financial croupiers always win.” The alternative that Bogle offers, the low-cost mutual index fund is, he asserts, “the only investment that essentially guarantees that you will capture your fair share of the returns that business earns.” The book itself goes on to guide the reader through the process of understanding index funds as he explains their role and their relation to taxation and cost structures, defines different kinds of funds (Stock Funds, Bond funds, Exchange Traded Funds), and gives advice on selecting between funds.
  LibraryofMistakes | Apr 17, 2018 |
If you're investing in the stock market, you should start with this book. Hands down. It compares the long term performance of index investing to managed or mutual fund investing. The statistics and studies are compelling. Over 20-30 years, there is no comparison to index investing. It wins 100%.

If I was building a book list as a curriculum to learn investing, this would be first on the list. It's underlying principle is all about the power of compounding. In fact, the third last page sums this principle up wonderfully. I quote, "I am 85 years old and have never earned more than $25,000 a year. I started investing in 1974 with $500 (55YO). I have only bought - never sold. I remember when things were not going well, your advice was, 'stay the course.' (Author) He enclosed a list of his investments at the start of 2004: Total value, $1,391, 407".

Based on the studies in this book, it's alarming how over 10+ years, 90-something percent of managed funds underperform the broad stock market indices; In this case, the S&P500. This occurs for a variety of reasons, too many to discuss here, but still, the stats are black and white in favour of index investing. The book's case is that passive investing beats active investing easily over 20+ years, especially when factoring in brokerage and management costs.

An interesting point also from the book is the author's principle of asset allocation. Here, he advocats an investor direct 90% of their spare income (after living expenses) to passive index funds with the remaining 5-10% used for funny-money to speculate on other direct investment. Thinking about it, he has a very valid point. If an investment technique or strategy can significantly beat the market, then a 5-10% asset allocation will quickly catch and outperform the 90% passive allocation. If it can't, then just stick with the 90% passive index investing for the long term. Simple really.
This book is bundled with studies and statistics that shouldn't be ignored. ( )
  FirstWord | Jul 28, 2017 |
April 2009 Total return = the market, "helpers" only reduce that. Pay nothing to get everything. Earnings Growth Dividends = return which is fairly consistent over time. Speculation is a measure of emotions up/down. The miracle of compounding returns is overwhelmed by the tyranny of compounding costs. Time (not timing) and low cost win (including low taxes). Don't look for the needle, Buy the haystack. ( )
  deldevries | Jan 31, 2016 |
Book is more about convincing you about long term index investing. If you are expecting information on fundamental analysis, this one is not for you! ( )
  ganesh.kudva.groups | Mar 31, 2013 |
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"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.

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