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A review by ajafrost
The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John C. Bogle
4.0
3.5 stars.
Halfway through this book (and on vacation, no less!) I dropped what I was doing to navigate through Vanguard's extremely unfriendly interface and buy a low-fee index fund that tracks the market. That is to say: Bogle effectively makes his case.
But as others have pointed out, he makes his case too many times. This book reads extremely defensively, like someone told Bogle you won't believe him unless he proves his point in a thousand slightly different ways, with a thousand slightly different examples. It was too much for me; I started rolling my eyes whenever I could see him leading up to his "misguided investment X" versus the "all-mighty, will-never-fail-you low-cost index fund."
Here's what I'm taking away from The Little Book of Common Sense Investing (which could be littler...):
- Investing is a zero-sum game. If one investor wins, another loses. It's better to own the whole pie than duke it out for slices.
- Reversion to the mean (RTM) means picking a mutual fund based on past experience is foolhardy.
- Reduce as many "unnecessary" investment-related costs as necessary, e.g. sales load, commission fees, buying and selling costs, etc. These costs have a huge impact on your lifetime ROI, thanks to...
- The magic of compounding interest. Okay, I didn't need Bogle to teach me about this, but his premise rests on the investor's ability (both financially and mentally) to buy and hold. In the long run, this leads to $$$$$$.
If you want to be convinced yourself, read this book. If you need a reason to stay away from cryptocurrency, buying and selling individual stocks, trying to predict the next recession, etc., read this book. If you're happy with the summary above and can find your way to a low-cost index fund, skip it.
Halfway through this book (and on vacation, no less!) I dropped what I was doing to navigate through Vanguard's extremely unfriendly interface and buy a low-fee index fund that tracks the market. That is to say: Bogle effectively makes his case.
But as others have pointed out, he makes his case too many times. This book reads extremely defensively, like someone told Bogle you won't believe him unless he proves his point in a thousand slightly different ways, with a thousand slightly different examples. It was too much for me; I started rolling my eyes whenever I could see him leading up to his "misguided investment X" versus the "all-mighty, will-never-fail-you low-cost index fund."
Here's what I'm taking away from The Little Book of Common Sense Investing (which could be littler...):
- Investing is a zero-sum game. If one investor wins, another loses. It's better to own the whole pie than duke it out for slices.
- Reversion to the mean (RTM) means picking a mutual fund based on past experience is foolhardy.
- Reduce as many "unnecessary" investment-related costs as necessary, e.g. sales load, commission fees, buying and selling costs, etc. These costs have a huge impact on your lifetime ROI, thanks to...
- The magic of compounding interest. Okay, I didn't need Bogle to teach me about this, but his premise rests on the investor's ability (both financially and mentally) to buy and hold. In the long run, this leads to $$$$$$.
If you want to be convinced yourself, read this book. If you need a reason to stay away from cryptocurrency, buying and selling individual stocks, trying to predict the next recession, etc., read this book. If you're happy with the summary above and can find your way to a low-cost index fund, skip it.