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The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
“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: 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.
216 pages, Hardcover
First published January 1, 2007
About the author
John C. Bogle
48 books536 followersJohn Clifton "Jack" Bogle (born May 8, 1929) is the founder and retired CEO of The Vanguard Group. He is known for his 1999 book Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor, which became a bestseller and is considered a classic.
More on http://en.wikipedia.org/wiki/John_C._...
More on http://en.wikipedia.org/wiki/John_C._...
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Displaying 1 - 30 of 1,743 reviews
August 23, 2015
What did I think? I'll get back to you in about 30 years.
May 1, 2017
While it was indeed a little book, it was much longer than it needed to be. The whole book can be summed up in one sentence: Buy and hold a low cost index fund. You're welcome, you've essentially just read the book.
December 14, 2009
After hearing so many references to John Bogle and his followers, the Bogleheads, I decided I had to read this book. The author, John Bogle, invented the index fund and founded Vanguard.
I really liked this book; it's one of the better investing books I've read. It contains just the right amount of empirical evidence in the form of statistics, graphs, and charts to be convincing, but not eye-glazingly boring. To back up his assertions, he points to "the relentless rules of humble arithmetic." Bogle comes across as very experienced and intelligent. In case you find yourself questioning Bogle, the end of each chapter contains a "Don't Take My Word For It" where well-known investors agree with Bogle on the chapter's topic.
Bogle's main point is that the best (most efficient) investment strategy is to buy and hold all publicly traded US businesses at a low cost. He recommends this very simple approach as a superior alternative to the incredibly complex array of specific investment options available today. He describes this as Bogle's Corollary: "Don't look for the needle in the haystack. Just buy the haystack!"
This book is definitely worth a read for anyone investing in the stock or bond markets.
Notes
• The average annual total return on stocks of 9.6% has been created almost entirely by enterprise, with only 0.1% created by speculation.
• Rely on Occam's Razor and keep it simple; buy a portfolio that owns shares in every US business and hold it forever.
• "Where returns are concerned, time is your friend. But where costs are concerned, time is your enemy."
• Index funds don't trade from security to security, so they tend to avoid capital gains taxes.
• Stocks and stock funds suffer from reversion to the mean (RTM): the tendency of above-average performance giving way to average or below-average performance in the long term.
Selecting a fund adviser
• fee-based, not commission-based
• fee <1% of assets
Keep costs low
• expense ratio
• loads, AKA purchase or sales charges
• turnover
• taxes
• Use index funds for bonds and money markets too.
• Focusing on growth or value funds isn't worthwhile, because all sectors still revert to the mean. Stick with the total stock market.
ETFs
• Total stock market ETFs can replicate or improve on index funds, if held long-term
• ETFs are often too narrowly focused
• ETFs incur brokerage and trading costs
• Only use ETFs to diversify portfolio
The 2 sources of the superior returns of index funds:
1. The broadest possible diversification (eliminates all risk except market risk)
2. The tiniest possible costs
Portfolio
95-100% Serious Money
• 50-100% total US stock market index funds
0-5% Funny Money
• individual stocks
• actively managed funds
Acceptable variations:
• max 20% total international index fund
• "modest amount" emerging markets
• 10% value
• 5% small cap
Asset allocation rule of thumb: hold a bond position equal to your age, or your age minus 10%.
I really liked this book; it's one of the better investing books I've read. It contains just the right amount of empirical evidence in the form of statistics, graphs, and charts to be convincing, but not eye-glazingly boring. To back up his assertions, he points to "the relentless rules of humble arithmetic." Bogle comes across as very experienced and intelligent. In case you find yourself questioning Bogle, the end of each chapter contains a "Don't Take My Word For It" where well-known investors agree with Bogle on the chapter's topic.
Bogle's main point is that the best (most efficient) investment strategy is to buy and hold all publicly traded US businesses at a low cost. He recommends this very simple approach as a superior alternative to the incredibly complex array of specific investment options available today. He describes this as Bogle's Corollary: "Don't look for the needle in the haystack. Just buy the haystack!"
This book is definitely worth a read for anyone investing in the stock or bond markets.
Notes
• The average annual total return on stocks of 9.6% has been created almost entirely by enterprise, with only 0.1% created by speculation.
• Rely on Occam's Razor and keep it simple; buy a portfolio that owns shares in every US business and hold it forever.
• "Where returns are concerned, time is your friend. But where costs are concerned, time is your enemy."
• Index funds don't trade from security to security, so they tend to avoid capital gains taxes.
• Stocks and stock funds suffer from reversion to the mean (RTM): the tendency of above-average performance giving way to average or below-average performance in the long term.
Selecting a fund adviser
• fee-based, not commission-based
• fee <1% of assets
Keep costs low
• expense ratio
• loads, AKA purchase or sales charges
• turnover
• taxes
• Use index funds for bonds and money markets too.
• Focusing on growth or value funds isn't worthwhile, because all sectors still revert to the mean. Stick with the total stock market.
ETFs
• Total stock market ETFs can replicate or improve on index funds, if held long-term
• ETFs are often too narrowly focused
• ETFs incur brokerage and trading costs
• Only use ETFs to diversify portfolio
The 2 sources of the superior returns of index funds:
1. The broadest possible diversification (eliminates all risk except market risk)
2. The tiniest possible costs
Portfolio
95-100% Serious Money
• 50-100% total US stock market index funds
0-5% Funny Money
• individual stocks
• actively managed funds
Acceptable variations:
• max 20% total international index fund
• "modest amount" emerging markets
• 10% value
• 5% small cap
Asset allocation rule of thumb: hold a bond position equal to your age, or your age minus 10%.
November 8, 2019
I regret buying this book so much - I should have invested the $19.99 instead. The whole book can be summarized in one sentence: index ETFs are better than mutual funds because they track the whole (or a good chunk of the) market and have very low costs. There. The whole book.
April 3, 2017
One sentence summary: Invest in index funds.
October 12, 2018
In all my ventures into the books on stock market, I had never come across a book as useless as this one. The author keeps telling you that from the first page to the last that you should follow his advise on chucking mutual stocks and become passive nobody that only invests on index funds and sits for the next 10 years to earn an average profit. To support his statement (while claiming that he invented the index funds) he uses arguments such as tax, agent fees, half quotes from famous people, stupid examples on why this worked (you may be able to find many more on why this did not work!), etc.
The writing is awful. The author's futile at humor fail to create the slightest of smiles. He keeps repeating phrases such as the "relentless rules of humble arithmetic" as many as what feels like a million times (there is even a chapter with that name).
I have only one recommendation to anyone reading this. Stay well away from this book. Your time has more value...
The writing is awful. The author's futile at humor fail to create the slightest of smiles. He keeps repeating phrases such as the "relentless rules of humble arithmetic" as many as what feels like a million times (there is even a chapter with that name).
I have only one recommendation to anyone reading this. Stay well away from this book. Your time has more value...
December 2, 2021
This is a funny little book. It starts out very fun, making a strong case to attach itself to Thomas Paine's Common Sense, The Rights of Man and Other Essential Writings, the book that led to the American Revolution.
While the idea doesn't exactly feature all throughout this piece of good advice, it does underscore the obvious idiocies and point to a classy, simple solution. Kinda like the causes for the Revolution.
So, what, we need to overthrow the stock market? Um.. no. The actual idea is pretty damn simple and backed up with massive proof in the massive pudding.
*Buy* *Hold*
It outperforms almost everything. Second-guessing, day trading, money managers, almost everything else performs worse. It's pretty simple. Don't pay for middlemen, diversify for yourself, and have it rock out with compound interest.
Unfortunately, the rest of the book is just a lot of repeating the same good idea, always pushing for the value of ETFs, and it highlights how the system OUGHT to work, without interference or bad actors. All good, as far as that goes. So, if we live in a perfect world, this is just about perfect. And maybe it'll work fine for most, even so, but the point is to get going EARLY so the compound works FOR you.
Honestly, the book could have been even shorter but what is here is still good. I've seen most of these ideas many times before, even so.
While the idea doesn't exactly feature all throughout this piece of good advice, it does underscore the obvious idiocies and point to a classy, simple solution. Kinda like the causes for the Revolution.
So, what, we need to overthrow the stock market? Um.. no. The actual idea is pretty damn simple and backed up with massive proof in the massive pudding.
*Buy* *Hold*
It outperforms almost everything. Second-guessing, day trading, money managers, almost everything else performs worse. It's pretty simple. Don't pay for middlemen, diversify for yourself, and have it rock out with compound interest.
Unfortunately, the rest of the book is just a lot of repeating the same good idea, always pushing for the value of ETFs, and it highlights how the system OUGHT to work, without interference or bad actors. All good, as far as that goes. So, if we live in a perfect world, this is just about perfect. And maybe it'll work fine for most, even so, but the point is to get going EARLY so the compound works FOR you.
Honestly, the book could have been even shorter but what is here is still good. I've seen most of these ideas many times before, even so.
January 31, 2020
I get it. Invest in index funds that are low cost, broadly diverse, and hold hold hold.
Great idea, but much of the book is spent smacking you over the head with the idea.
Great idea, but much of the book is spent smacking you over the head with the idea.
April 14, 2019
Bogle deserves a million stars for starting Vanguard and bringing us the concept of low-cost index funds. I'll even go one better and agree with the fundamental premise of this book, that almost everyone should have broad-based indexing as the foundation of their investment plans.
This book is essentially a dismantling of vast swaths of the financial industry, especially the mutual fund. Step by step, and through the relentless application of real-world performance numbers and statistics, Bogle shows investing for what is it is - a zero sum game where people who don't index, take money from each other while also paying the entire industry that is in place to chase mythical outperformance via mutual funds. The result? Underperformance.
Rather than try to find a needle in a haystack, why not just buy the haystack (he's full of colloquialisms and folksy charm)? Boom. Indexing.
My biggest issue with the book is that it pokes a stick at the largest turd in the industry (mutual funds) and then says, "indexing is a heck of a lot better than this." He's right, of course; but he neglects including other allocation possibilities. He quotes Buffett several times without mentioning that his market-crushing performance is still in full effect and investors are still being rewarded by it or that stock picking services like the Motley Fool have a great track record of consistently outperforming market averages on most of their real-money portfolios. Clearly, there are some ways to invest that do beat the market - I just wish that Bogle had spent a little time getting into what it takes to be successful in those other areas. I think there's a way of doing that without diminishing the awesome power of the main thesis.
This book is essentially a dismantling of vast swaths of the financial industry, especially the mutual fund. Step by step, and through the relentless application of real-world performance numbers and statistics, Bogle shows investing for what is it is - a zero sum game where people who don't index, take money from each other while also paying the entire industry that is in place to chase mythical outperformance via mutual funds. The result? Underperformance.
Rather than try to find a needle in a haystack, why not just buy the haystack (he's full of colloquialisms and folksy charm)? Boom. Indexing.
My biggest issue with the book is that it pokes a stick at the largest turd in the industry (mutual funds) and then says, "indexing is a heck of a lot better than this." He's right, of course; but he neglects including other allocation possibilities. He quotes Buffett several times without mentioning that his market-crushing performance is still in full effect and investors are still being rewarded by it or that stock picking services like the Motley Fool have a great track record of consistently outperforming market averages on most of their real-money portfolios. Clearly, there are some ways to invest that do beat the market - I just wish that Bogle had spent a little time getting into what it takes to be successful in those other areas. I think there's a way of doing that without diminishing the awesome power of the main thesis.
March 2, 2016
"The greatest enemy of a good plan is the dream of a perfect plan." Stick to the good plan.
Index funds are those good plans that will save you from failing in the dreams of a perfect plan.
Index funds are those good plans that will save you from failing in the dreams of a perfect plan.
June 11, 2021
A simple short book for any beginner who wants to invest in stocks and don't know how/where to start. The main message is clear, logical, and simple:
Invest ONLY in index funds. They are the most cost effective.
And do NOT invest in actively-managed mutual funds because on the long run they are not efficient.
I would recommend the book for anyone who wants to start investing but doesn't want the headaches and the more technical stuff.
Invest ONLY in index funds. They are the most cost effective.
And do NOT invest in actively-managed mutual funds because on the long run they are not efficient.
I would recommend the book for anyone who wants to start investing but doesn't want the headaches and the more technical stuff.
July 24, 2018
This book is based on The Intelligent Investor, John C. Bogle did a good job explaining investment options with pros and cons. This would be a great book to start since this book was written for normal people, not financial specialists. This comes with a cost of nothing extraordinary if you are looking for something more than basic information about stocks and bonds you should pick another book.
February 19, 2023
To embrace common Sense is to acknowledge our limitations and be rational in our decision-making. For a layman new to investing, the best, risk-free, and easiest method to accumulate wealth over the long term is through systematically investing in Index Funds. I was introduced to John C. Bogle when I read Tony Robins' Money Master the Game in 2016. John C. Bogle had done his Ph.D. in Mutual Funds from Princeton University and founded the first-ever Index Fund Vanguard 500 in 1976.
To simplify indexing for beginners, let us assume that we do not have the appetite for risk, prowess, and time to choose the best stock from the market that would make us a millionaire in the future. Instead, if we choose to own the entire market by collectively investing in all the listed companies, we would be able to make a similar profit in line with the upward movement of the chosen Index. The tenet of Index investing is that even if we cannot beat the market, we still do not lose our invested money (risk-free).
Back-of-the-envelope calculations suggest that investing a sum of Rs. 5000 a month, with an annual step-up of 10%, would accomplish the below-said figure within thirty years. Assuming that the annualized return would be a minimum (conservative) 9%, the invested sum of Rs. 40,00,000 would lead to a total value of Rs. 1,43,00,000 in thirty years. Thanks to the beauty and magic of compounding. But John C. Bogle also makes a significant point in this book on the tyranny of costs by stating, “Where returns are concerned, time is your friend. But where costs are concerned, time is your enemy.” In the context of mutual funds, it is also important to note the Expense Ratio (ER) which includes the cost attributed to managing and operating the active fund. Though Index Funds, typically carry low costs, the key is to choose a fund with the lowest ER.
Other key takeaways from the book:
1. Occam’s Razor: When there are multiple solutions to a problem, choose the simplest one.
2. Don’t look for the needle. Buy the haystack.
3. Buying funds based purely on past performance is one of the stupidest things an investor can do. Past performance does not reflect future progress.
4. Real Returns = Nominal Returns - Inflation Rate - Management Fees. Hence, Cost matters. A lot.
5. Expense Ratios are strong predictors of performance. Funds with high ER tend to carry high risk and lower returns.
If we imbibe a sense of patience and discipline by starting early, consistent investment throughout the runway would lead to desired results within twenty years without having to go through sleepless nights thinking about the market volatility. Warren Buffet once said, “It is not necessary to do extraordinary things to get extraordinary results." Starting early, and mimicking the market by investing in Index Funds is the best way to ensure that we live a comfortable post-retirement life.
To simplify indexing for beginners, let us assume that we do not have the appetite for risk, prowess, and time to choose the best stock from the market that would make us a millionaire in the future. Instead, if we choose to own the entire market by collectively investing in all the listed companies, we would be able to make a similar profit in line with the upward movement of the chosen Index. The tenet of Index investing is that even if we cannot beat the market, we still do not lose our invested money (risk-free).
Back-of-the-envelope calculations suggest that investing a sum of Rs. 5000 a month, with an annual step-up of 10%, would accomplish the below-said figure within thirty years. Assuming that the annualized return would be a minimum (conservative) 9%, the invested sum of Rs. 40,00,000 would lead to a total value of Rs. 1,43,00,000 in thirty years. Thanks to the beauty and magic of compounding. But John C. Bogle also makes a significant point in this book on the tyranny of costs by stating, “Where returns are concerned, time is your friend. But where costs are concerned, time is your enemy.” In the context of mutual funds, it is also important to note the Expense Ratio (ER) which includes the cost attributed to managing and operating the active fund. Though Index Funds, typically carry low costs, the key is to choose a fund with the lowest ER.
Other key takeaways from the book:
1. Occam’s Razor: When there are multiple solutions to a problem, choose the simplest one.
2. Don’t look for the needle. Buy the haystack.
3. Buying funds based purely on past performance is one of the stupidest things an investor can do. Past performance does not reflect future progress.
4. Real Returns = Nominal Returns - Inflation Rate - Management Fees. Hence, Cost matters. A lot.
5. Expense Ratios are strong predictors of performance. Funds with high ER tend to carry high risk and lower returns.
If we imbibe a sense of patience and discipline by starting early, consistent investment throughout the runway would lead to desired results within twenty years without having to go through sleepless nights thinking about the market volatility. Warren Buffet once said, “It is not necessary to do extraordinary things to get extraordinary results." Starting early, and mimicking the market by investing in Index Funds is the best way to ensure that we live a comfortable post-retirement life.
November 25, 2017
(4.0) Big long sell on low-expense ratio broad index funds. Logic makes sense and if I weren't already a convert, would definitely take seriously. It's so interesting that so many investors do not.
- things that cost investors in actively managed mutual funds:
— expense ratio
— turnover (fees cut into profits and cap gains lead to premature taxation)
— higher taxes
— [something about consuming nearly all dividend gains?]
— transaction/load/redemption fees
— investor emotion: buying funds when market up, picking mutual fund ‘winners’ who inevitably regress to the mean and lose them money
— also note that avg tenure as a fund manager is 9 years, and tons of funds close when they have a poor performance period...so likelihood of finding a true winner manager AND it she still leading it 30 years later is exceedingly slim. Plus, you’d have to wait about 25 years to know who that is, by which time you’ve already missed out!
Heading into 2017 and beyond: brace yourself for lower than historical returns (lately very low dividend yield (companies chasing growth?), very high P/E ratio that will probably regress to the mean). With inflation at ~2%, returns will be very slim. Fees on mutual funds historical based on big days of 70s and 80s but will now result in negative expected return.
Corey raised a very interesting point: is the fact that so many people are in index funds turning /it/ in to a 'fad' to the point that it artificially inflates the value of S&P500 stocks? Can this imbalance cause problems / result in some sort of correction down the line that makes S&P index funds dangerous?
- things that cost investors in actively managed mutual funds:
— expense ratio
— turnover (fees cut into profits and cap gains lead to premature taxation)
— higher taxes
— [something about consuming nearly all dividend gains?]
— transaction/load/redemption fees
— investor emotion: buying funds when market up, picking mutual fund ‘winners’ who inevitably regress to the mean and lose them money
— also note that avg tenure as a fund manager is 9 years, and tons of funds close when they have a poor performance period...so likelihood of finding a true winner manager AND it she still leading it 30 years later is exceedingly slim. Plus, you’d have to wait about 25 years to know who that is, by which time you’ve already missed out!
Heading into 2017 and beyond: brace yourself for lower than historical returns (lately very low dividend yield (companies chasing growth?), very high P/E ratio that will probably regress to the mean). With inflation at ~2%, returns will be very slim. Fees on mutual funds historical based on big days of 70s and 80s but will now result in negative expected return.
Corey raised a very interesting point: is the fact that so many people are in index funds turning /it/ in to a 'fad' to the point that it artificially inflates the value of S&P500 stocks? Can this imbalance cause problems / result in some sort of correction down the line that makes S&P index funds dangerous?
July 20, 2020
This is surprisingly a good book.
I thought it was going to be extremely basic beginners guide and only scratch the surface of the investment world.
This book does not really talk about the investment world, it just talks about index funds within the stock market. I feel like they should have chosen a better title. It is all about proving that index funds are the best (profitable while being safe) bet for investing, with hard factual evidence. Get rid of all your money managers, consultants, financial advisors, brokerages, fee's, mutual funds and just buy low cost index funds like Vanguard. It's that simple lol
This is not a beginners book. One needs an intermediate level of knowledge on the stock market for this book.
Definitely a re-read because it's hard to listen as an audiobook, I'd rather read about ROI %'s than hear them.
FYI the audiobook does not follow the book
I thought it was going to be extremely basic beginners guide and only scratch the surface of the investment world.
This book does not really talk about the investment world, it just talks about index funds within the stock market. I feel like they should have chosen a better title. It is all about proving that index funds are the best (profitable while being safe) bet for investing, with hard factual evidence. Get rid of all your money managers, consultants, financial advisors, brokerages, fee's, mutual funds and just buy low cost index funds like Vanguard. It's that simple lol
This is not a beginners book. One needs an intermediate level of knowledge on the stock market for this book.
Definitely a re-read because it's hard to listen as an audiobook, I'd rather read about ROI %'s than hear them.
FYI the audiobook does not follow the book
December 18, 2017
I'm posting the last of my 2017 reads here this month without reviews, so that they'll count towards this year's Goodreads Reading Challenge. Full review coming in early 2018.
August 22, 2016
This book can be summarized as:
Point 1: Index funds are better than ETFs, mutual funds, individual stocks, etc. Here are 7 chapters using statistical and historical data to prove it. Don't believe me? Here's a chapter cap from another source that agrees with me.
Point 2: Money managers have their own best interest in mind, and have fees. Avoid them and do your own managing. Here are 7 chapters using statistical and historical data to prove it. Don't believe me? Here's a chapter cap from another source that agrees with me.
The information in the book is useful, but it seriously could've been written in ten pages, with an optional additional 20 chapters of, "Here are the numbers if you want proof."
Point 1: Index funds are better than ETFs, mutual funds, individual stocks, etc. Here are 7 chapters using statistical and historical data to prove it. Don't believe me? Here's a chapter cap from another source that agrees with me.
Point 2: Money managers have their own best interest in mind, and have fees. Avoid them and do your own managing. Here are 7 chapters using statistical and historical data to prove it. Don't believe me? Here's a chapter cap from another source that agrees with me.
The information in the book is useful, but it seriously could've been written in ten pages, with an optional additional 20 chapters of, "Here are the numbers if you want proof."
May 23, 2018
The book reiterated the same point from start to finish. What could have been a much smaller book, was stretched to the very limits. While there were a scant number of ideas presented, with the entire focus pretty much being on ETFs, there was well presented data to explain why the solitary conclusion had been drawn for a range of scenarios.
February 3, 2021
I’ll let you know what I really think in about 30+ years!
April 26, 2020
Simple analysis showing why investing in low-cost index funds should be the main approach to follow as an investor. A littler bit repetitive in the first chapters but some very interesting points towards the end about ETFs and (brief) asset allocation. Definitely makes a convincing point, sharing a handful of opinions given by experts in the field that agree and (some) also adopt it in their own portfolios. Not an extensive guide as it could have compared this passive strategy to invest in the market with some other strategies but a strong guidebook nevertheless.
March 29, 2021
Excellent book on the topic, very analytical, data-driven, based on numbers not arguments, referring to experts, simple still in-depth, well researched, tracking history while forecasting future, taking many factors into account including taxes and management costs, including deep comparisons of core message with alternatives of investment, logical, and very well explained. The sole minus point is that it is very repetitive, reiterating on the same point from different angles. A must-read on investing.
July 21, 2021
Definitely a lot of sound advice to be found in the book. However I found the author’s line of reasoning inconsistent - in some cases drawing from statistics and historical outcomes, in some just saying “I doubt it would work” without doing much analysis (e.g. when talking about whether to invest in US or globally and when talking about factor models). Also, it is clear the book is intended for the widest possible audience, resulting in it being extremely repetitive and at times too simplistic.
July 30, 2023
i told my dad i never want to have to think abt stocks for the rest of my life and he gave me this book. author had points and i definitely did learn a lot. gonna enter my financially knowledgeable girl era 🔜 should it prob be 5 stars yes but i am not giving a book abt investing the satisfaction of being 5 stars.
September 29, 2020
في ظل تزايد الحديث عن العجز في صناديق التقاعد واحتمالية تأجيل سن التقاعد أكثر وأكثر، حدثني أحد الأصدقاء عن فكرة الاستثمار المتواصل في صندوق المؤشر أو ما يعرف بإسم اندكس فند، وتحديدًا إس اند پي ٥٠٠ وهو ما يعتبر من الاستثمارات الآمنة نسبيًا والأكثر ربحية على المدى الطويل بحيث يضمن الشخص مستقبل تقاعده
في هذا الكتاب يطرح جون بوغل أو القديس جاك كما يناديه محبوه هذه الفكرة، ويناقش صلاحيتها في قبال الخيارات الاستثمارية الأخرى. بوغل هو مؤسس مجموعة ڤانغارد في السبعينات، والتي أصبحت اليوم أحد أكبر صناديق الاستثمار في العالم وتدير استثمارات تقدر بترليونات الدولارات. ڤانغارد هي أول مؤسسة مفتوحة للعامة تتميز بطريقة الاستثمار في صندوق المؤشر ولكنها ليست الوحيدة طبعًا
الفكرة بسيطة جدًا ولكنها قوية. لا تحاول صناديق المؤشر "هزيمة السوق" أو تحقيق أرباح أعلى من المتوسط، بل تكتفي بمتابعة مؤشر السوق بشكل دقيق (استثمار خامل)، بحيث تعطي أرباحًا متساوية معه، حوالي ٩.٦% سنويًا أو ٦.٧% عند أخذ التضخم في الاعتبار، ولكنها تأخذ نسبة أتعاب صغيرة جدًا جدًا مقابل ذلك؛ واحد إلى إثنين من عشرة من واحد بالمئة ٠,٠١%. ويتم استثمار أي أرباح من جديد لينمو رأي المال ويتضاعف مع السنين
يقارن بوغل بين هذه النسبة والنسبة العالية التي تأخذها صناديق الاستثمار المشترك العادية، والتي تحاول بشكل نشيط هزيمة مؤشر السوق. لا تقتصر المبالغ المقتطعة على الأتعاب المرتفعة لمن يديرون هذه الصناديق بشكل نشيط، بل على كلفة التعاملات الكبيرة التي يقومون بها، والأنشطة الدعائية، ومستوى الضرائب المرتفع الذي يجب عليهم دفعه. عند حساب كل هذا، فإن الأرباح الحقيقية للمستثمر تكون أقل بكثير مما يتم الإعلان عنه في الدعايات
يستشهد بوغل بالأرقام، خاصة المتعلقة بفترات طويلة، ليبين أن أرباح صناديق المؤشر هي الأفضل بالنسبة للغالبية شبه المطلقة من المستثمرين، ويستشهد كذلك بآراء الكثير من كبار المستثمرين الذين يتفقون معه، وعلى رأسهم وارين بافت. الكتاب مقنع جدًا وفكرته تبدو صائبة.
في هذا الكتاب يطرح جون بوغل أو القديس جاك كما يناديه محبوه هذه الفكرة، ويناقش صلاحيتها في قبال الخيارات الاستثمارية الأخرى. بوغل هو مؤسس مجموعة ڤانغارد في السبعينات، والتي أصبحت اليوم أحد أكبر صناديق الاستثمار في العالم وتدير استثمارات تقدر بترليونات الدولارات. ڤانغارد هي أول مؤسسة مفتوحة للعامة تتميز بطريقة الاستثمار في صندوق المؤشر ولكنها ليست الوحيدة طبعًا
الفكرة بسيطة جدًا ولكنها قوية. لا تحاول صناديق المؤشر "هزيمة السوق" أو تحقيق أرباح أعلى من المتوسط، بل تكتفي بمتابعة مؤشر السوق بشكل دقيق (استثمار خامل)، بحيث تعطي أرباحًا متساوية معه، حوالي ٩.٦% سنويًا أو ٦.٧% عند أخذ التضخم في الاعتبار، ولكنها تأخذ نسبة أتعاب صغيرة جدًا جدًا مقابل ذلك؛ واحد إلى إثنين من عشرة من واحد بالمئة ٠,٠١%. ويتم استثمار أي أرباح من جديد لينمو رأي المال ويتضاعف مع السنين
يقارن بوغل بين هذه النسبة والنسبة العالية التي تأخذها صناديق الاستثمار المشترك العادية، والتي تحاول بشكل نشيط هزيمة مؤشر السوق. لا تقتصر المبالغ المقتطعة على الأتعاب المرتفعة لمن يديرون هذه الصناديق بشكل نشيط، بل على كلفة التعاملات الكبيرة التي يقومون بها، والأنشطة الدعائية، ومستوى الضرائب المرتفع الذي يجب عليهم دفعه. عند حساب كل هذا، فإن الأرباح الحقيقية للمستثمر تكون أقل بكثير مما يتم الإعلان عنه في الدعايات
يستشهد بوغل بالأرقام، خاصة المتعلقة بفترات طويلة، ليبين أن أرباح صناديق المؤشر هي الأفضل بالنسبة للغالبية شبه المطلقة من المستثمرين، ويستشهد كذلك بآراء الكثير من كبار المستثمرين الذين يتفقون معه، وعلى رأسهم وارين بافت. الكتاب مقنع جدًا وفكرته تبدو صائبة.
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September 29, 2020What can I even say. We do live in a society and need to save money, and the general concept to invest in index funds rather than playing the stock market seems sound. However, this book presents an individual solution to a systemic problem and doesn't seem to seriously consider that there are any inherent flaws in this capitalist system that leads people to have to invest money to be able to retire in the first place. Like, he keeps on talking about how Main Street can make investing work for it, but like, what is this "Main Street?" Really it just seems to refer to rich and upper middle class white people who can afford to invest money in the first place. Furthermore he constantly conceptualizes taxes as theft which is just like ... taxes lead to services that benefit everyone!! He's also really into explaining investment income as "earning our fair share of whatever returns our businesses are generous enough to provide" and there's just so much going on there that I can barely handle breaking it down. Where does generosity come in to this???? Are taxes not exactly what he is describing here in a way that would positively impact everyone, rather than just the lucky few who can afford to invest?
May 7, 2021
É bom mas não é o que eu esperava. Os livros de finanças e investimentos escritos por estrangeiros tendem a serem de duas naturezas: Elencam comportamentos que podemos aplicar ao nosso cotidiano e/ou falam sobre investimentos mas que devido a diferença de país precisamos traduzi-los pro nosso mercado. Esse trata-se do segundo caso mas sofre com repetições sobre o índice SP&500 - que é de se esperar - e que o autor insiste o livro inteiro como sendo a solução dos problemas seguindo a ideia de possuir "todo o mercado".
Algumas passagens sobre custos, fundos alavancados e manada são sempre boas de serem relembradas.
Algumas passagens sobre custos, fundos alavancados e manada são sempre boas de serem relembradas.
January 11, 2018
Книга одной идеи, разумная. Все было изложено в лучшей форме Баффетом.
April 24, 2020
“The greatest enemy of a good plan is the dream of a perfect plan.”
This should be the first investment book that everyone reads. I think it paints a pretty good picture of how an individual should be investing - all the while re-iterating that his way is not the only way. I really enjoyed Bogle's writing style. Whatever he presented were backed by just enough facts so as to not get boring.
Start early, create a good plan and stay the course!
This should be the first investment book that everyone reads. I think it paints a pretty good picture of how an individual should be investing - all the while re-iterating that his way is not the only way. I really enjoyed Bogle's writing style. Whatever he presented were backed by just enough facts so as to not get boring.
Start early, create a good plan and stay the course!
July 20, 2021
Continuing my binge of investing related non-fiction The Little Book... is technically short, but relatively dense with information - basically the most straightforward and thorough explanation for why Passive Index funds are the best bet for long term stock investors.
Coupled with A Random Walk Down Wall Street this Bogle provides both challenge and reassurance for Stock Investors and in my opinion is a must read for those on the topic.
Coupled with A Random Walk Down Wall Street this Bogle provides both challenge and reassurance for Stock Investors and in my opinion is a must read for those on the topic.
January 12, 2024
An extremely important message, a mediocre book.
It is a simple, yet powerful idea. Bogle's theory is that the objectively best way to guarantee good return on investment is to invest in a low-cost index fund and hold it forever. It is in idea that has stood the test of time, and has moved from the fringe to the mainstream in the 50 or so years since Bogle first posited it. It is commonly given advice to the investing public and perhaps the most common investment strategy for retirement funds.
In this book, Bogle backs his theory up with simple, easy to understand mathematical concepts and with statistics from the market's history. He convinces the reader beyond doubt that actively managed funds and attempts to make an earning by timing the market always lose out on the long run.
However, there were a lot of moments when I felt that the book didn't meet my expectations. Granted, explaining the mechanics of the market is not the purpose of the book, but there were a bunch of places where I felt the how and the why of the stock market behavior that the author describes where missing. The book overall feels very repetitive, I feel like it could have been half its size, or smaller. One perplexing part that I'm still yet to understand is the fact that Bogle considers ETFs an abomination. They definitely are somewhat antithetical to some of the book's core theses, but I don't see the difference between buying and holding an ETF vs a mutual fund if they track the same index. I felt like this should have been explained more given the immense popularity of broad market index ETFs.
All things considered, I still think people should read the book, even if just to really hammer into the head the importance of low middleman costs, the magic of indexing and the phenomenon of return-to-mean.
It is a simple, yet powerful idea. Bogle's theory is that the objectively best way to guarantee good return on investment is to invest in a low-cost index fund and hold it forever. It is in idea that has stood the test of time, and has moved from the fringe to the mainstream in the 50 or so years since Bogle first posited it. It is commonly given advice to the investing public and perhaps the most common investment strategy for retirement funds.
In this book, Bogle backs his theory up with simple, easy to understand mathematical concepts and with statistics from the market's history. He convinces the reader beyond doubt that actively managed funds and attempts to make an earning by timing the market always lose out on the long run.
However, there were a lot of moments when I felt that the book didn't meet my expectations. Granted, explaining the mechanics of the market is not the purpose of the book, but there were a bunch of places where I felt the how and the why of the stock market behavior that the author describes where missing. The book overall feels very repetitive, I feel like it could have been half its size, or smaller. One perplexing part that I'm still yet to understand is the fact that Bogle considers ETFs an abomination. They definitely are somewhat antithetical to some of the book's core theses, but I don't see the difference between buying and holding an ETF vs a mutual fund if they track the same index. I felt like this should have been explained more given the immense popularity of broad market index ETFs.
All things considered, I still think people should read the book, even if just to really hammer into the head the importance of low middleman costs, the magic of indexing and the phenomenon of return-to-mean.
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