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The Little Book of Common Sense Investing

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The Little Book of Common Sense Investing

The Only Way to Guarantee Your Fair Share of Stock Market Returns

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

John C. Bogle has a stock tip for you: Never invest in individual stocks. Buy an index fund and invest in the entire market instead.

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Editorial Rating

9

Qualities

  • Innovative
  • Applicable

Recommendation

Author John C. Bogle is the former chairman and CEO of The Vanguard Mutual Fund Group, the world's largest pure no-load mutual fund company. In 1976, he conceptualized, developed and introduced the world's first index fund for the individual investor. This brand new investment product revolutionized the financial marketplace. In the words of Dr. Paul Samuelson of M.I.T., "The creation of the first index fund by John Bogle was the equivalent of the invention of the wheel and the alphabet." Today, index funds account for $1 trillion in invested funds. Everyone from investment genius Warren Buffett to Nobel Laureates Samuelson, William Sharpe and Daniel Kahneman recommend index funds for the typical investor. Bogle explains what index funds do and why they are reliable investments in this exhaustively researched, carefully reasoned, highly accessible, common sense book. If you are an investor, getAbstract believes you should take Bogle seriously; after all, he invented this alternative.

Summary

Intelligent Investing

Benjamin Graham's Intelligent Investor was published in 1949. He was considered his era's most astute money manager, and his book is a classic of sound investment advice. He points out that most investors do not have the professional training, expertise, or time to analyze the worth of companies and the value of their current stock offerings. Nor do they have the ability to predict what a company's stock value will be at some future point in time. He therefore advised his readers to be consistently conservative in their stock choices. He advised investing in a "defensive portfolio," an overly broad selection of diversified stocks which, once purchased should be held on to for the long term.

Graham warned investors against relying too heavily on brokers who make their money through trading commissions. He pointed out that such brokers' short-term financial interests clearly conflicted with their clients' long-term investment goals. Graham further explained that, mathematically, the odds never favor the individual broker or investor. While Graham wrote positively about mutual funds, he pointed out that from 1937 to 1947, the typical mutual fund ...

About the Author

John C. Bogle is the founder and former chairman and CEO of one of the largest mutual fund companies in the world. He is an author of numerous popular books on investments. In 2004, TIME named him as one of the world's 100 most powerful and influential people.

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