Brilliant by a financial guru

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	• The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns ... John C. Bogle Wiley, 2007 - 208 pages average customer review:based on 76 reviews view larger image
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highly recommended

Valuable Investment Advice

I have been "investing" for years without a sustainable strategy. The information provided in this book is educational, reassuring and eye-opening. Mr. Bogle showed that Investing need not be complicated and provided many examples and facts to support his assertions. If you need good, sound proven financial advice from an industry giant, this is invaluable and a must-read book. I bought 5 copies (one is audio CD) and gave them to my friends and sister.

Brilliant by a financial guru

This is the most important book on retirement. if you don't buy anything else, get this one!

In the Peter Lynch mode of thinking

Beat the pros with common sense!

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The Best Advice Ever

The Facts Are In The Numbers

There is a repetitive theme in this book, not redundance. And it's supported by expert analysis, portfolio comparisons, and the numbers: "humble arithmetic." Over time Index Funds out-perform most managed mutual funds. The longer the amount of time, the more detrimental the damage - if - you own managed funds. "Where returns are concerned, time is your friend. But where costs are concerned, time is your enemy."

Bogle notes (like so many others) how fund advertisements mislead and outright lie by stating that "X fund has an annual average return of 12% per yer," but omits the costs: portfolio transaction costs, Load charges, 12-1bs, and taxes accrued on realized gains. (And inflation must always be factored.) The S&P 500 rose by an average of 12 percent for twenty years, but most managed mutual funds got far, far, lower returns than that.

The 4 E's: Enemies of Equity investors are Expenses and Emotions, according to Warren Buffet.

Financial Intermediation has created enormous fortunes for those n the fields of managing other people's money.

One example:
Merrill Lynch is the largest brokerage firm in the world. One of its biggest marketing and profitable successes also created one of the biggest losses for investors. At the height of the bubble in 2000, Lynch launched two new funds: the "Focus Twenty" and the "Internet Strategies" Fund. Like clockwork, at the height of the bubble frenzy the consumers were drawn in. The best time to sell a fund is the worst time for consumers to buy it. $2 billion dollars poured into Merrill Lynch. "Internet Strategies" sank almost immediately and lost 86 percent, while the "Focus Twenty" (which comprised the top 20 favorite stock picks of Merrill Lynch managers) lost 28% in 2000, 70% in 2001, and 39% in 2002 (p. 106). Ouch. A lot of funds declined in this three-year period, but not nearly as much. Funds chosen by managers earn 40 percent less than index funds, in general (source, NY TIMES).

But it's not just John Bogle that states this. Bogle hits home with his "Don't take it from me" passages throughout the book, quoting and sourcing what other financial minds say about managed vs. index funds, and organizational and individual investment psychology. There are tons of exhibits and tables with comparisons. Sources are provided throughout.

Relation to 401K and IRAs:
IMO, regular non-IRA (non tax deferred) index funds can be a vehicle that supersedes endangered Defined Pension Benefit Plans for those wanting to add more than the limits, or simply supplement the IRA and 401K limits to retirement accounts. Or, add more diversification and control over one's portfolio. Indexing can also be useful for those that don't have the two tax-deferred options available to them and is another choice because of low taxation and low expense costs.

Including indexing another but related topic, company pensions can inhibit and limit the worker. They often anchor employees into a company or industry. Many want to change, but stay and wait to cash out. The pension fund makes the rules. They tell you how long to stay to receive X amount.

This the best investment book I've ever read. It's also been the most honest.

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An aptly titled book

As a professional portfolio manager since the 1960's [now retired] I most highly recommend this book. I have purchased copies for my adult children, as well as for some for-profit and non-profit boards on which I serve. I am telling all that this easy, one-day read has the potential to be a financial life-enhancing event, if they agree with the basic premise. And that there is no reason not to agree with the premise. I very much like that Bogle includes supporting data at the end of every section. A true five-star book.

Outstanding Investment Book

This is the best investment book I've ever read. John Bogle's common sense approach to investing is easy to follow and very profitable. I wish I had this knowledge 25 years ago! Highly recommended!

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reviews: 1, 2, 3, 4, 5, 6, page 7, 8, 9, 10, 11, 12, 13, 14, 15, 16

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