The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
Written by John C. Bogle
Narrated by Thom Pinto
4.5/5
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About this audiobook
John C. Bogle's The Little Book of Index Investing is a power-packed explanation of why outperforming the market is an investor illusion. Instead, the founder of The Vanguard Group—the man who's been called "the conscience of the investment industry"*—recommends a simple, time-tested investment strategy that can deliver the greatest return to the greatest number of investors: indexing. Why? Investing is a zero-sum game where transaction costs, taxes, poor investment diversification, and poor market-timing (an affliction for most investors) hurts your portfolio more than it helps. Indexing eliminates that hurt. Bottom-line, if you can't be an index, why not invest in one? And you'll be all the happier and richer for it.
*Time Magazine
John C. Bogle
John C. Bogle is founder of The Vanguard Group, Inc. and president of the Bogle Financial Markets Research Center. He created Vanguard, one of the two largest mutual-fund organizations in the world, in 1974 and served as Chairman and CEO until 1996 and Senior Chairman until 2000. Designated by Fortune magazine as one of the investment industry’s four “Giants of the 20th Century,” in 2004 he was awarded the Woodrow Wilson Award from Princeton University, his alma mater, for distinguished achievement in the nation’s service. That same year Time magazine named Mr. Bogle one of the world’s 100 most powerful and influential people.
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Reviews for The Little Book of Common Sense Investing
334 ratings18 reviews
- Rating: 4 out of 5 stars4/5The message of this book are very clear, and John Bogle makes sure that you will understand it by repeating it too many times.The message is the following: the best investing strategy is to invest in the american companies, all of them, from all sectors, or more practically in an index fund(S&P500, etc), and to hold on through the roller coaster of the market.But Bogle offers more than this first step, the next step is making sure to MINIMIZE costs, in the form of taxes, and fees. Bogle shows, convincingly, how in the long term, expense ratios as little as 1% add up in the long run to make a significant difference on the returns of one's portfolio.One must always keep in mind the story presented in the beginning of the book, where a family is prospering by investing in real business, but is soon deranged by mediators who charge fees and promise returns, only to take up a big portion of the income that the whole family used to enjoy. This point is very important, maybe not for Bogle, but for any aspiring Bogle.
1 person found this helpful
- Rating: 5 out of 5 stars5/5Easy to follow, and very interesting ideas.
A highly suggested read! - Rating: 5 out of 5 stars5/5Truly one of the best books out there. I truly cannot recommend it enough, to get you started in investing. John Bogle is truly a great pioneer and the his philosophy is truly shown in this book.
- Rating: 5 out of 5 stars5/5"When dumb money starts to realize it's limitations, it ceases to be dumb money."
Keep it simple:
Diversify your long term investments with low cost, low tax index funds and you'll win the money game long term. That's the one sentence summary. The book goes deeper into the thesis, and it's worth every second of the listen. Give it a shot - Rating: 5 out of 5 stars5/5Jack Bogle met his intended goal with this book.. Providing common sense, simple (but not easy to follow) advice for a stress free way of achieving investment success. In the time since this book was published, it has become simpler than ever to follow his advice since there are numerous brokerage apps that can be downloaded directly to any smart phone. However, although this has made things simpler, it has made following Jack's advice even harder. There are constantly new asset classes (crypto, pokemon cards, etc.), funds, industries, and all sorts of things being sold to the average investor at every turn. But having been in the investment markets for some time now, I fully abide by Jack's common sense approach and am sticking by his advice to "Stay the Course." This book is a must read for anyone looking to get into investing or even as a reminder to those being bombarded by the new flavor of the month funds month in and month out.
- Rating: 5 out of 5 stars5/5The absolute only book you need on investing. Buy and hold index.
- Rating: 5 out of 5 stars5/5This is one of the best investment books I have read!
- Rating: 3 out of 5 stars3/5Good overall point but too repetitive. Very numbers focused which is ideal for some people, not for me.
- Rating: 4 out of 5 stars4/5April 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.
- Rating: 5 out of 5 stars5/5A great book.Everyone should read it. Truly wonderful and amazing.
- Rating: 5 out of 5 stars5/5Book tell you everything and anything you need to know about the index fund and other alternatives and proves with hundreds of facts and information to support claims.
- Rating: 4 out of 5 stars4/5This is the first of several books on investing that I plan to read to better educate myself and take greater personal control of my finances. If John Bogle had his way, it would probably be my last. That is because his investment strategy is rather simple. He thinks most investors should pick a very low-cost index fund, his pick would be the S & P 500 or a total market fund, both of which are near identical. He advises you to purchase this as early as you can and then hold onto it for as long as you can, basically until you retire. With this simple strategy, he argues you will capture most of the growth of the total market, which is better than the vast majority of investors who believe they can beat the market through timing, stock picking, having talented money managers, or some other strategy. This value strategy may be a bit boring, but he makes a strong argument, through pure math and statistics, that it is sound. If you're really into cryptocurrency, poker, trying to figure out what company or sector will be the hottest, or other high stakes and exciting gambles, you won't necessarily gravitate to this kind of investing. It's just too plain vanilla and dull and won't give you the returns to turn on your adrenaline. On the other hand, this slow and steady approach to wealth-building might just be the advice that you should follow.
- Rating: 4 out of 5 stars4/5Informative 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.
- Rating: 5 out of 5 stars5/5If 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.
- Rating: 4 out of 5 stars4/5Book is more about convincing you about long term index investing. If you are expecting information on fundamental analysis, this one is not for you!
- Rating: 3 out of 5 stars3/5This is the first book that I have read on index investing and I was a little disappointed. The author spells out his investment strategy of using index funds to cover the whole market very eloquently in the first couple of chapters. After that the little book of common sense investing does not seem so little as the later chapters drag on and just seem to constantly repeat what has already been stated.Also it is a bit too US centric for a a potential investor from the UK.
- Rating: 3 out of 5 stars3/5Index Funds sums it all up. A quick read, but leaves you wanting more. More like William Bernstein’s ‘The Four Pillars of Investing’ which is a superior read.
- Rating: 5 out of 5 stars5/5I'm 29-going-on-30 and wishing that I had absorbed the wisdom imparted in this book when I first signed up for a 401k. But here I am, seven years later, finally having a real understanding of where I should stash my retirement nest egg.The premise behind this book is simple - index funds have proven to be the wisest vehicle to throw your money in to achieve long-term profits. Bogle does an excellent job of explaining why this is, utilizing the "humble arithmetic" behind his thesis. For those who are like my old self and unsure of the best way to invest your retirement savings, look into low-cost index funds. And don't just throw your money in there...purchase this book and understand WHY you should.