The Little Book of Common Sense Investing

304 pages, 2017

John C. Bogle

Takeaways

Description

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 a 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 and 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.

The Power of Simplicity

John C. Bogle emphasizes the importance of keeping your investment strategy simple. He suggests that investing in a low-cost index fund is a smart move. This approach is easy to understand and manage, and it often yields better results than trying to beat the market.

Cost Matters

Bogle makes it clear that the cost of investing is a crucial factor to consider. High-cost funds often eat into your returns, leaving you with less money in the long run. So, it's worth taking the time to research and find low-cost investment options.

Stay the Course

In The Little Book of Common Sense Investing, Bogle advises investors to stay the course. This means sticking to your investment plan, even when the market is volatile. He believes that long-term investing, rather than short-term speculation, is the key to success.

The Fallacy of Stock Picking

Bogle challenges the idea that picking individual stocks is a good investment strategy. He argues that it's nearly impossible to consistently pick winners and beat the market. Instead, he recommends investing in the entire market through an index fund.

The Importance of Diversification

Diversification is a key theme in Bogle's book. He suggests that spreading your investments across a wide range of stocks can reduce risk and increase potential returns. So, take a look at your portfolio and see if it's diversified enough.

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A low-cost index fund is the most sensible equity investment for the great majority of investors. John Bogle's book is a manual to build financial security.

Warren Buffett - Investment Guru

Bogle's reasoned precepts can enable a few million of us savers to become in 20 years the envy of our suburban neighbors—while at the same time we have slept well in these eventful times.

Paul Samuelson - Economist, Academic

The Little Book of Common Sense Investing is the guide to intelligent investing. It should be read and understood by all who strive to achieve their financial goals.