The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits) Reviews

• Great concise investing guide!

  
  By A2A1LS2NX3SMOE on 2007-03-04
  This latest book from Vanguard founder John Bogle is a gem. For those of us who are investment junkies, his past works have been superb, but a little overwhelming for regular readers who need their guidance in smaller and more direct terms.
  
  The Little Book of Common Sense Investing fills that void. For Bogle fans, this is a summary of what we already know and you will not find a lot that is dramatically new or different. For readers who need a stern lecture on what is right and what is wrong, this is a perfect guide.
  
  One nice touch in this new book are a variety of quotes Bogle uses that say "If you don't believe me" or "Don't take my word for it". He quotes Warren Buffet, Benjamin Graham and other major figures that confirm the advice he gives is right.
  
  With all the large confusing investment books on the market today, this one provides a small friendly guide that allows the reader to focus on the behaviors that lead to success in investing. This is the finest new book on investing in 2007 and a must read for all investors who need to cut through the noise to find the truth. Thank you Mr. Bogle!
  
  Mike Kavanagh, CFP ®
  Atlanta, GA
  
  

• Presents great, low-maintenance investment advice

  
  By A16ZJF0NNTOEPR on 2007-03-01
  "The Little Book of Common Sense Investing" is the third book in the Little Book series from Wiley. I reviewed the previous two, "The Little Book that Beats the Market" and "The Little Book of Value Investing".
  
  The first book (Beats the Market) really captured my attention. In fact, after reading it last year I went out and invested in some of the stocks the author recommended on his site (more on that in a moment). I quickly realized that if I truly wanted to follow the "Beats the Market" approach I was going to have to spend more time on investment research than I originally planned. That's where "The Little Book of Common Sense Investing" really shines.
  
  Bogle's book is all about index funds and why they're the smart alternative for just about any type of investor. Rather than trying to beat the market, and risk coming up short, why not just match the market's results with a good, low-fee index fund?
  
  I won't try to go into all the details in this short review, but the author also predicts weaker stock and mutual fund performance in the coming years. Although nobody can predict the future, of course, his logic is hard to refute. It also makes index fund investing look like a very smart choice.
  
  As I mentioned earlier, I invested in 7 different stocks shortly after reading "The Little Book that Beats the Market". Those stocks, along with their performance to date are as follows: ASPV (down 18%), CECO (up 41%), BVF (up 44%), OVTI (down 11%), WON (down 2%), ALDA (up 20%) and GIB (up 27%). Those mixed results clearly highlight the importance of a diversified portfolio!
  
  Speaking of a balanced portfolio, after reading "The Little Book of Value Investing" I wound up putting a good portion of the rest of my money in an index fund, VBINX, which is up 4% since I invested. All those investments are up a total of 8.4% to date...not bad, given that I only bought all these about 6-7 months ago.
  
  Now that I know I don't have the time to keep rolling things over and figuring out what new stocks to pick, I think I'm going to liquidate all the stocks shortly and go with the Vanguard 500 Index, VFINX. Could I make more money by playing the buy-and-flip game? Maybe, but I'm in this for the long haul and am perfectly content to follow Bogle's advice on index funds.
  
  

• A compelling brief for indexing over "beating the market"....

  
  By A56AA52NMMKYQ on 2007-10-31
  Author John Bogle makes a compelling case for index funds as THE wisest investment vehicle as opposed to active traded or managed funds. He argues persuasively that actively traded funds are fraught with costs that compromise yield and that trying to "beat the market" is a Loser's Game that only enriches the intermediaries such as stock brokers and investment managers. Two concerns, though.
  
  The book's title somewhat overreaches, though, given its almost exclusive focus on index funds. The title implies a broader perspective on investing, whereas the laser-like focus is on index funds. As a result, I personally have a "truth in advertising" issue with the book.
  
  Second, the book is a one-idea treatise that beats the dead horse again and again and again to the point where it is overkill and repetitious.
  
  These are relatively small quibbles. Anyone holding investments or considering embarking on an investment program should read THE LITTLE BOOK OF COMMON SENSE INVESTING, subject to these two caveats.
  
  
  

• Clear and Forceful Presentation

  
  By A39NVY8RPC1YH4 on 2007-03-20
  Who better to make a straightforward argument for the index mutual fund than the man who developed the first of its kind for Vanguard in 1975. The stock market offers the return of the businesses it represents to investors. These returns are not received, because rather than 'buying' the market with a fund that tracks those returns, investors are sold actively managed funds that try to outperform the market and in the end dilute those returns with crippling fees and costs from excessive trading. The argument has been made by other distinguished writers in recent years, but investors will find this industry giant's take on the matter forceful.
  
  What's new is Bogle's sobering expectations for future market returns. Over the past century companies have produced a 4.5% dividend yield and a 5% earnings growth rate (9.5%) for investors - before actively managed fund costs have stripped away much of that wealth. Today dividend yields on equities are under 2%. Earnings growth rates in the future may or may not be lower than the historical average. What seems apparent is that investors are less willing to pay for those earnings than they have in the past - as measured by a decline in price earnings ratios. Bottom line: we may be looking at a period of market returns of just 7-8%, and after all the "intermediary" costs of the mutual fund industry, investors will see that return dramatically reduced. This is why costs matter. The index mutual fund is the least expensive way to get the market's return into your pocket. Unfortunately, many 401 (k) retirement plans do not include some of the key U.S. and international indexes recommended by Bogle.
  
  Bogle's view of the flood of ETFs (exchange traded funds) that slice and dice markets into specialized sectors is that they have only increased risk with the illusion that they have diversified it away. They are a "wolf-in-sheep's clothing". That they can be so actively traded (long and short) defeats the underlying idea of owning the market for its long-term gains. Ultimately ETFs fail to offer the "quintessential" promise of a total stock market index fund to "earn [a] fair share of the stock market's returns". He sarcastically suggests they carry warning labels. Industry insiders will sit-up at Bogle's swipe at noted Wharton professor, Jeremy J. Siegel (author of the widely admired, STOCKS FOR THE LONG RUN). Recently Siegel has helped promote a family of ETF securities that shift the composition of the underlying indexes from a traditional capitalization weighted model to one that emphasizes dividends. For Bogle, these are siren songs based on data mined ideas that my or may not work in the future.
  
  
  
  

• Quick and simple introduction to index investing

  
  By A2JYLKCOUMP2PS on 2007-06-27
  John Bogle created the world's first index fund in 1975. In this book, he describes why you should make index funds the core of your investment portfolio.
  
  Bogle starts off with introducing index funds through a parable that describes how middle-man costs in finance eat away at investors' profits. He discusses why speculation doesn't work and why business reality (in his definition, divident yields plus earnings growth) is more important that market expectation (changes in P/E based on what investors are willing to pay for various equities).
  
  Bogle spends a few chapters discussing various problems with regular actively managed mutual funds, covering issues with performance (he asserts that less than 1% of all mutual funds were able to beat the market consistently over the past half century), various costs (expense ratios, sales charges, advertising fees, turnover costs, tax implications), poor market timing, and finally the difficulty of choosing a mutual fund (he states that there's no good way to pick a fund, since we can't foretell the future, and past performance is not an indicator of what's to come). He brings the reader to the "common sense" conclusion that index funds, in their pure simplicity, are the logical choice for any investor, as they provide the diversified return of the entire market with miniscule fees and minimal effort.
  
  The last few chapters cover bond funds, ETFs, and a few pages of investment advice - which boils down to keeping at least 50% (if not all) of your money in broad-market index funds. Interestingly, Bogle spends a chapter discussing what Benjamin Graham would have thought about index funds, citing various quotes from Graham's "The Intelligent Investor" and certain blurbs from Warren Buffet. He, of course, concludes that Graham would have praised index funds.
  
  So, did I like the book? Yep.. it was pretty good. Bogle writes very clearly and visibly tries to keep his discussions simple and to the point, so as to appeal to the widest possible audience. And with good reason! Bogle's advice is very applicable to the many individual investors today - index funds are a great low-cost and low-maintenance way to get your share (or all, as Bogle suggests) of the market's return.
  
  To convince the reader, Bogle uses many diagrams to illustrate returns of various mutual funds vs. index funds, and to compare what your original investment would look like after a certain time - based on how it was invested. I found an error in one of the diagrams - exhibit 10.1 (and the text around it) on page 108 lists the average fund advisor return as $188,500 instead of $88,500. Not a big deal, but it slightly undermines the point he's trying to make on that page. Overall, I feel that Bogle's diagrams illustrate some good harsh realities - he clearly illustrates how a few percentage points (i.e. the costs associated with actively managed mutual funds) can eat away enormous chunks of your money over time.
  
  To bring more authority into his argument, Bogle provides a "Don't Take My Word for It" section at the end of each chapter, where he quotes various respected investors and professors to support the points he made in the chapter. I enjoyed this, but it's important to be aware that some quotes can often be interpreted very differently outside a certain context.
  
  One very obvious issue with this book is that Bogle is selling his own product - Vanguard's funds. He doesn't try to hide this in any way. He uses Vanguard's funds in nearly all examples, and he often hints how his "world's first index fund" is the greatest thing since sliced bread. You can't really blame the man - his contribution to the world of finance and investing is enormous, and he damn well should be proud of his accomplishments. So I think it's okay to cut Bogle some slack in this area.
  
  The book is short - about 215 small-size pages. You can probably sit down and read it in a few solid hours. It also goes pretty quickly, as the material is not dense and easy to follow. However, some may argue that the book is too long for what it is trying to demonstrate. True, Bogle's advice really can be summed in just a few pages - index funds are a great choice for the average investor. But I have to say that I enjoyed reading the examples and history that he provides.
  
  In conclusion, I recommend this book to any individual investor. While Bogle's advice is in no way eye-opening or revolutionary (chances are, you already know that index funds are a very low-cost and low-maintenance way to diversify), it is good to remind yourself the reasons why you should stay away from most actively managed mutual funds. As Bogle describes, this is all common sense - but we're often blinded by flashy advertisements, hot market sectors, and seemingly-reachable dollar signs. This book is a good reality check for the average individual investors.
  
  I wish I could give this book 4.5 stars - but since I can't due to Amazon's rating system, I feel that it is more of a 4-star book rather than a 5-star one. It has solid advice, but it should not be considered the end-all of investing, and some of the advice and quotations should be taken with a grain of salt. Overall, however, it's a great and insightful read. I plan to buy a couple extra copies to give to my family.
  
  Pros:
  + quick and easy read
  + lots of examples and diagrams to demonstrate how high expense ratios and other hidden costs can devastate a portfolio's return
  + some good basic investment advice: buy and hold, avoid emotional decisions, don't be enticed by "new hot trends" (as by the time you find out about them, prices are already inflated), diversify into the whole market, look into costs before buying, etc.
  + great format - short chapters, useful data, neat quotation sections at the end of each chapter
  
  Cons:
  - some may be turned off by Bogle's plugs for Vanguard funds (this didn't really bother me)
  - may seem lengthy to drive one main point home (but keep in mind that there are quite a few good tid-bits scattered throughout the book)
  - take some citations with a grain of salt
  
  
• Common Sense Isn't So Common
  By A22W6A6KOQO4O2 on 2007-03-16
  What's in the book is just what the title says - obvious common sense.
  
  This book is for people that want to move up their financial goals by using techniques so simple, my son Kevin implemented them last year when he was in second grade. Don't confuse simplicity with stupidity, Bogle notes.
  
  If these techniques are really so simple, why doesn't Wall Street "get it?' Because they are paid a small fortune not to understand it. In fact, it's critical that the grand illusion continue.
  
  The book is a battle pitting the Wall Street machine, glitz, and emotion against only the relentless rules of simple arithmetic. Even Wall Street, however, doesn't have the might to overcome simple arithmetic. It's a bloody battle where most that try to disprove mathematics, end up being the casualties.
  
  You may be thinking this book merely says to buy index funds or exchange traded funds. Actually, Bogle notes that many index funds and most exchange traded funds are the wrong thing for investors. Yes, Wall Street took his indexing concept and morphed it into vehicles that would make them rich, at the cost of the investor. These are known as "enhanced" or "specialized" funds that are far closer to active investing than many disciplined investment funds - like Berkshire Hathaway.
  
  Bogle explains what investors should do to capture the returns of capitalism. You may be surprised to learn that he goes beyond saying only own the broad index funds. In fact he says individual stocks and active mutual funds are okay, under certain conditions. It's okay to have a little fun, he says.
  
  If you are absolutely convinced that you or your advisor will beat the market, then don't read this book - it will only make you sick to your stomach with irrefutable logic. This book is only for those wanting to guarantee your fair share of stock market returns.
  
  
  
• Sound advice, poor reading
  By A66HESZ3U7O4U on 2007-04-18
  Bogle makes a compelling argument that investing in broad index funds provides good long-term returns. He clearly explains the reasons why actively managed funds are inferior to index funds: 1) high turnover of holdings causes losses due fees and taxes; 2) componded impact of management fees; 3) chasing "the best" funds results in poor timing and returns. Bogle admits that broad indexing might not be the single best investment strategy, but clearly explains that it outperforms the vast majority of investment portfolios and "styles" of investing. The beauty of indexing is in its simplicity, and that one does not need to spend time researching the various stocks for picking the winners. Therefore, non-experts with essentially no knowlede or effort can have better returns than the majority of expert portfolio managers do. Broad indexing is a buy and hold strategy. The book is written in a style that is very easy to understand, even for an 8th grader. However, the book is boring, extremely repetitious, and could have been cut back by at least a third. Each chapter ends with "Don't Take My Word For It" - quotes from reputed experts supporting Bogle's indexing approach. What is missing from the book is any reference to dissenting opinions. For example, Bogle argues the virtue of broad diversification. Some investors disagree with Bogle on several key points, including the broad diversification, but they are not quoted. For example, Bogle did not quote James P. O'Shaughnessy's book "Predicting the Markets of Tomorrow". O'Shaugnessy explains why broad indexing may produce inferior returns if one invests around the peak of the stock market cycle. The approximately 20-year cyclicity of the stock market is not even mentioned in Bogle's book. This is most unfortunate. Bogle misleads the reader when he reiterates that the real reaturn of the stock market is about 7%. Whereas this is true for a period of 80 years, the typical investor's horizon is much shorter than that (about 20 years), and that has a major impact on the returns within a 20-year market cycle. O'Shaughnessy's approach of favoring a blend of large-cap value and small-cap value index funds (ETFs to be held for about the next 15-20 years) in the current phase of the cycle appears to be a better advice than the broadest index fund. I expected to see a more rigorous analysis from the Author, and on that account, I was disappointed. Bogle's advice is nevertheless definitely worth considering.
  
  
• Redundant
  By AZA00IPGP973U on 2007-06-27
  To summarize: Don't waste your money w/active mutual funds, simply purchase the entire stock market via an index fund.
  
  By all means save your $$$ and do not buy this book. The information is simply repeated in each and every chapter.
  
  
  
• The Best Advice Ever
  By A22LX6529JJ166 on 2007-08-06
  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.
  
  
• Basic Investing Advice
  By A2KX9LYRYJJ0QH on 2007-03-28
  For those investors who are familiar with Bogle and his investing philosophy (from his previous books, speeches, and appearances in the financial media)there is nothing new here. The book is a basic compilation of Bogle's views on investing, based on a long and distinguished career in the financial services industry. He is outspoken, very smart, firm in his opinions based on extensive research, and wants to make sure that investors get a fair shake when investing.
  
  Bogle goes to great lengths, backed up by data, to show that investing in broad-based low-cost index funds for the long-term is the way to build wealth. He frowns upon the use of actively managed funds and most ETFs as not adding value, but says some money can be allocated to them if you've done your homework on the investment manager and the composition of the ETF (should be an index ETF only) respectively. He has harsh criticism for those companies and advisors that do not add value to investors' return yet reap $400 billion a year in commissions and fees.
  
  Perhaps the next reprint or revision of this book will contain an index which will make finding certain topics less cumbersome. I was surprised not to find a recommended portfolio allocation for different age investors, as well as a list of recommended funds. While he does include a number of funds as examples in tables, he never pulls everything together to recommend a specific domestic, international and bond fund for purchase. He does say that the bond percentage of your portfolio should be equal to your age (age 40 have 40% bonds, and that international investments should be no more than 20% of the portfolio.
  
  Overall, Bogle presents a cogent look at investing in today's uncertain world with a solid, easy to implement investment approach that has stood the test of time. He is steadfast in his views on long-term investing and has shown that investing in the entire stock market is the best approach. This book is a great primer for new investors of all ages, and for those who are not sure of what they are doing.
  
  
  
  
• An aptly titled book
  By AF8TS6Z67KTE2 on 2007-08-14
  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.
  
  
• Compelling Evidence for Index Investing
  By A35XHCIDXYM9W8 on 2007-03-15
  Jack Bogle's latest book provides an excellent introduction to low-cost and low-risk Boglehead-style investing. The subtitle reads "The Only Way to Guarantee Your Fair Share of Stock Market Returns", but that is too modest. In fact, the content nearly guarantees that an investor can receive better returns than 90% of invested money over the long term.
  
  When buying this book, I was looking for a good book to give friends and family who are still gambling with individual stocks and actively-managed mutual funds. Bogle's new book comes close to the mark, and is especially compelling when demonstrating that index funds are a better investment than active mutual funds for most investors.
  
  The role of taxes, fund expenses and investor behavior on investors' returns is solidly brought home in this book. Not much new information for the already-converted Bogleheads among us, but good intellectual wisdom for investors not familiar with these forms of investment return thievery.
  
  This book also includes a discussion of bonds and bond funds, where similar points are driven home.
  
  Common Sense Investing is less compelling in demonstrating that index funds are better than individual stocks for most investors. The risk of individual stocks is described as uncompensated, but it could have benefited from more persuasive quantitative evidence to bring home the point.
  
  Bogle projects the next decade's stock market returns, which is a bonus. Bogle provides persuasive rational for relying on dividend yields, earnings growth and changes in speculation in describing returns.
  
  The Table of Contents is less than 100% descriptive of the contents and the absence of an index makes it a little difficult to use the book as a reference.
  
  Common Sense Investing is a great book, but would have benefited from more discussion of asset allocation, which is a huge determinate of returns. Thus it does not stand as a single book to guide investment decision-making.
  
  A great gift book to give to stock market gamblers.
  
  
  
• Here is something else to consider...
  By A6RBW7SQRR5GK on 2007-05-11
  Many other folks have written solid and fair reviews of this book. Still, you may be unconvinced. Perhaps you are thinking, as we all do at some point in our lives: I don't need to study indexing; instead, I will just do one (or more) of the following:
  
  -- Subscribe to Morningstar.
  -- Read the latest quarterly fund results in MoneyMag/Time/Barrons.
  -- Go down to the library and look at Value Line.
  -- Call my brother.
  -- Read the Wall Street Journal every day.
  -- I'll go into a bank. They have actual buildings. I'm not sending my money off to an index fund at some PO Box.
  -- Watch CNBC / FNN / etc, every morning.
  -- Watch Jim Cramer in the evening; he has a sharp mind and I suspect that I don't.
  -- Talk to the people at work. They are pretty smart, and have made tens of millions, and go on golfing cruises.
  -- Subscribe to a PC charting service that is updated daily.
  -- Call my broker; his funds' expenses are so high that they must know what they are doing.
  -- Buy a lottery ticket; obviously there is a high possibility of great returns. And no effort.
  -- I'll set up a trust; the lawyer is recommending a top financial guy.
  -- Take a trip to Vegas; I'll come back much richer.
  -- But one of those real-estate packages as shown on late-night TV.
  -- Visit a psychic.
  -- Rely on my children for retirement.
  -- This is all too complicated. I'll go out and buy a new car.
  -- The market went down 10%; I'll sell.
  -- The market went up 10%; I'll buy.
  -- I am a woman; I can't understand my 401-Ks.
  -- I am a man; I already know everything about 401-Ks.
  -- I don't believe in 401-Ks because taxes will be higher in retirement.
  -- I've always lost money in the market; I'm going to invest in Gold.
  
  The list goes on and on. We have all tried several. Granted, they may have a positive return, but they didn't perform as well as the S&P 500 on a long-term basis, did they?
  
  This is a highly commendable book. Bogle's other books have helped me (and countless others) secure our retirement.
  
  I suspect that there are some people who claim not have enough time to read this book. To them, I would recommend finding 15 minutes per week by: a) giving up the sports pages, or, b) giving up Cosmopolitan, or, c) giving up American Idol.
  
  In that 15 minutes per week you can easily finish a chapter of the book, and in 18 weeks the book will be finished. But can you devote that effort to your retirement? Of course you can. Recall what Abraham Lincoln said: "I will study and prepare myself, and one day my day will come."
  
  Still no time? Consider the Audiobook version which will add value to your useless commuting.
  
  Later on, if you want to research these ideas further, please consider Burton Malkiel's excellent book "A Random Walk Down Wall Street" (which deals with the simple but ironclad rules of statistics in the market), or Bogle's other books such as "Bogle on Mutual Funds."
  
  May all the blessings of sensible investing be yours.
  
  
• Rip Van Winkle Equity Investing Brilliantly Explained
  By A1KX0ZB4HDCCGS on 2007-03-28
  Bogle lays out the case for index fund investing in a clear and easy-to-understand manner. Beyond stock picking, market timing and manager selection, he shows how passively holding low cost broad index funds over the long term has historically been the best place for most investors to be. It is a refreshing approach to Rip Van Winkle investing.
  
  
• Valuable Investment Advice
  By A3FX8QNVF0Q3SY on 2007-10-02
  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.
  
  
• Common sense from the individual investor's best friend
  By A1WGHGRN82I4VF on 2007-03-15
  Equity investors have three essential means of investing. They can select individual stocks, they can purchase shares of actively managed mutual funds or they can purchase shares of a broadly diversified index fund that incorporates substantially all of the market. Only those with considerable time, discipline, intellectual independence, and a solid understanding of business economics and financial analysis should even consider the do it yourself option of investing in individual stocks. These requirements eliminate almost all investors and for those who remain, the challange of outperforming the market is daunting.
  That leaves two alternatives--actively managed and index funds. Jack Bogle, using persuasive logic and common sense, makes the case for index funds. Because the signicantly greater costs of actively managed funds compared with index funds, actively managed are destined to trail the performance of index funds. A vast majority of active managers simply don't have the stock picking skills to overcome the cost differential.
  With fewer employers offering defined benefit pension plans, most people need to save aggressively and invest wisely to accumulate sufficient funds to meet lifetime needs. There is no better starting place than to read Jack Bogle's book. It is a little book with a very large message.
  
  
• Index fund genious
  By A2Z4KA3EFQWZOX on 2007-04-16
  The index fund is that great thing that no one has discovered. The idea of the index fund is to get around the fees of the mutual fund but still offer the investor protection against loses in individual stocks by spreading the investment over an entire inudstry or index or country. So one can buy an index that tracks small caps, or oil or Israel or the Dow. Almost everything is indexed these days. The idea that is that by spreading the risk one can gain the 10% a year average S and P gains that have been the norm since 1930.
  
  This book is a good introduction to understanding value investing and why to stay away from the high fees of mutual funds.
  
  A really interesting and brilliant little book, that truly should beat the market, or at least achieve similar results.
  
  Seth J. Frantzman
  
  
• I can sum up in three works...
  By A2Q74CEXHMD8S4 on 2008-02-10
  Buy index funds. That is it. I have just summed up this book in three words and now you don't need to waste your time and money on it.
  
  The title suggests this book is about investing. Well there is a lot more to invest in than index funds. Apparently the author has not heard of some of the more arcane investments such as stocks or options but you would not know it from reading this book.
  
  The book starts out telling you how the stock market is a zero sum game and how you can't beat the market. Then it tells you your only hope is to buy into an index fund and hold for the long term if you want any chance of coming out ahead. Then in the remaining 230 pages it repeats the points and quotes other well known investors in an effort to give the author an ego boost. And the quotes are dated and incomplete. For example he attributes a quote to former hedge fund manager Jim Cramer about how wonderful index funds are and how brilliant Bogle is. Well if you watch Mad Money or have read Jim Cramers books you know he urges people to invest in index funds if they have less than $10K to invest in the stock market or don't have the time to do the homework involved in owning a stock. If you have over that limit he urges you to invest in the market because with discipline and homework you will be able to beat the index funds.
  
  Overall I am very unimpressed with this book. If you want to read a book about investing I suggest any of these books. All of these books are excellent and provide you with the information you need to be a successful investor. And if you only want one to start I suggest the book by Mizrahi as it is outstanding.
  
  Getting Started in Value Investing (Getting Started In.....)
  Jim Cramer's Mad Money: Watch TV, Get Rich
  Jim Cramer's Real Money: Sane Investing in an Insane World
  The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market
  
  
• a worthy advisor on investments
  By AIGVDGERG24WK on 2007-04-14
  John Bogle's book is very simple to understand and its content is quite astounding. Bogle has a way of saying things that might irritate some people - "What I say is the truth and everybody else is wrong."
  
  He does support his data with a number of charts. So I suggest that rather than just believing his words, readers redo the math to reassure themselves that this book is not the ranting of some crotchety old man.
  
  All I needed is knowledge of simple arithmetic, and the formula for compound interest. So far I havent spotted an untruth.
  
  
• The one idea in book.
  By A90W6GUPRL9MI on 2007-07-13
  Not that great. The author really only had one idea to sell, and that was to buy an Index fund. Had lots of statistics and quotes from other people.
  
  
• Same point from first page to last page
  By A20HZ82ONSQ50S on 2007-05-26
  The book has some valuable insights into merits of index investing. But what can be written as a news paper article is written as a book. Then there are too many citations praising Bogle. Do they add any value for the readers? Probably some other book like "All about Index Funds" is better read.
  
  
• Excellent
  By A350HRB16YUX9P on 2007-06-13
  Convincing arguments as to why index fund investing is superior to managed mutual fund investing.
  
  
• a bit redundant but convincing
  By A2VTCMYGNB9T0E on 2007-12-21
  I can sum up the entire book in a short paragraph:
  
  Buy low expense index funds. You probably can't beat the market, so don't spend a lot of money/time trying to do so.
  
  The author makes his point over and over again, with frequent "I told you so" examples, which is a bit annoying. The book would have made a great 6 page magazine article.
  
  That being said, Bogle did convince me that he is right, leading to a radical change in my investment strategy.
  
  
• A shameless plug....
  By A2VDFHUOKFUZ4F on 2007-05-21
  OK already! I'm convinced!! I'll invest in an index fund, and in particualar, the Vanguard S&P 500 index fund.
  John Bogle, the founder of Vanguard, literally beats you over the head with statistical information to convince you to invest heavily in an index fund. The reasoning is simple: low low expenses, tax benefit, and a (near) guarantee that it will make you money over time. According to Mr. Bogle, this investing strategy is a sure thing.
  I wouldn't disagree with him for the average investor. I don't have the time or the desire to do the research necessary to manage my own investments, and I am extremely wary of handing my money over to someone else and hoping that they have my best interests at heart.
  As Ron Popeil might say of this technique, you just "set it and forget it."
  I like it. While all of this data and statistical information, and frequent quotes from other financial experts seems like overkill to make one little point, I think that most people, myself included, need this kind of overwhelming evidence before they are willing to make a move.
  It's good stuff. Take it for a spin, and judge for yourself.
  
  
• Bogle's Basics
  By A3TCMJ6GKZJFBQ on 2007-05-22
  This is a great book that gives a good history of the market's performance, compares mutual and index fund peformance....and repeatedly hammers home the message that the only way to guarantee market returns (less costs) is to buy and hold index funds with low costs. It's a lot repetetive, and Bogle's investment philosophy is clear. We'd all make more money in the market if we followed his advice.
  
  I think the parable of the story is that while we should follow his advice...we won't....the allure of better than average market returns makes us chase performance...at a cost. HIGHLY RECOMMENDED.
  
  
• Great idea ad nausium
  By A2DWEOEJQ37D5V on 2007-11-04
  I've been in a stock club for 10 years but I am still a nervous investor.
  
  This book gave me some great direction. Some of the other reviews are right...the message is buy an index fund. They cost less and give you the best risk/reward ratio.
  
  I got that in the first chapter. It just got repeated over and over and over.
  
  For a novice who wants to get into the market the cost of this book will likely be a minimal cost for lifetime earnings.
  
  If you want to save money here is the message: "buy a low cost fund that tracks the S&P 500 or the wilshire 5000. Buy it from vanguard of fidelity.
  
  
• Want to Sleep at Night and Pursue Other Hobbies?
  By A33H0WC9MI8OVW on 2008-01-20
  As expected, Bogle believes in the efficient market theory, meaning you cannot consistently and over the long haul beat the market. But even if you believe you can beat the market, or that you have developed a system that when backtested against market data, you can show that you beat the market, you still lose in the real world, where there are transaction fees, and worst of all, taxes. It might seem obvious, but taxes eat up a hefty portion of your gains, and most of the "systems" that beat the market statistically require you to be able to trade as soon as their indicator tells you. In the real world, this doesn't happen. You might decide to try to hold on for long term capital gains only to see your winnings evaporate. Or, if you take the trade, you must deduct immediately the taxes due. And now you must get lucky again on the next stock you put the money into, but with 45% less (Fed + CA state). Maybe noone has calculated how much your next stock has to gain just to make up the tax loss. And that is what Bogle points out is the folly of following systems that try to beat the market (assuming someone has one that works consistently).
  
  In the real world, investors consistently time the market incorrectly. Bogle shows mathematically that you are not guaranteed to even get the return that the fund shows as an average, if you're always buying at the top. Indeed many mutual funds expand and shrink as their relative performance goes up or down. Therefore the majority of the investors in that fund got in near the peaks, and tend to exit when the fund goes down. People are constantly switching to the Morningstar 4 or 5 star funds, not realizing that they are not getting the average gains that attracted them because they put their money in after the gains have already occurred.
  
  Finally, as he has preached over and over again, expenses are like this little cancer that truly can devastate any actively managed fund. Expenses can eat up what dividends are paid, and reduce the amount of your capital to be put to work in compounding (assuming you reinvest).
  
  EFT's can work for you if you buy and hold. However their very format of being traded in the secondary market encourage frequent trading. Bogle is not a fan of market timing, and this includes sector investing, which is a form of market timing. The pletora of index EFT's of all different colors and stripes allow people to easily invest in sectors that are hot and dump them when they are not. Problem again, taxes, transaction costs, and bad timing.
  
  I suppose the old adage, "simple is best", rings true here. Bogle does admit that being humans, we would get bored if investing were only so simple. So he suggests that you split your money into Serious Money Account (95%) and Funny Money Account (5%). Then after one year, five years, ten years, compare your results. Don't forget the taxes, make sure to set them aside immediately from your profits (move them to another account, so you can't cheat!). Bogle is betting that if you put your Serious Money Account in indexs you will beat your Funny Money Account. I'm thinking you'll also sleep better and have time to pursue other hobbies, as well as have it easier during tax time. Do I follow his advice myself? Well I haven't for more than 20 years, and honestly I'm not beating the market, as the -$3000 which shows up most years tells. Problem is knowing what to do, and giving up on the dream of being above average. You do know that everyone can't possibly be above average, right? Sleep tight and get rich, what are you waiting for?
  
  
• Fantastic book, Everyone should read
  By A18GIP5OI08PL0 on 2007-05-19
  This is an easy read. It truly makes sense. I truly wish I had read it 25 years ago. I would have saved a lot more money and not just made the brokers wealthy.
  It is in a language that is simpe and very understandable. There is a great lesson here for anyone that need to invest. Most people I know do not have the time to manage their own investments. Therefore, they should have a simple plan that does not milk them with fees.
  
  
  
• Should be standard text book for High Schools seniors!
  By A3M209TIIQ4Q7I on 2007-06-02
  It is grim fact that pensions are going the way of dinosours and every individual must be their own money manager. Most people listening to the noise of Wall Street which is designed to make long boring process of investing look overly exciting for ratings, is making many mistakes which could be costly on the long term. Many do not have the proper financial education and when they do turn to others for help they are often taken advantage of by the brokers (which go by many fancy titles) with expensive and sometimes even inappropriate products which often benefit the seller more than the investor.
  
  John C. Bogle gives a clear direction for investing and makes a very strong case for use of diversified index funds. He also quotes Nobel Laureates, famous investors such as Warren Buffet etc. at the end of each chapter in "Don't Take My Word for It" frames.
  
  It is a great book for someone just learning about investing as well as for those who are recovering from their mistakes and failures.
  
  Other books I would recommend to follow up are:
  
  A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition (Hardcover)
  The Four Pillars of Investing: Lessons for Building a Winning Portfolio (Hardcover)
  Capital Ideas: The Improbable Origins of Modern Wall Street (Paperback)
  
  
• Discipline and Patience!
  By A22RY8N8CNDF3A on 2007-11-22
  This book goes over again his Eureka moment on how to make money on the stock market. He saw something simple and it made sense to invest! Bogle has made a lot of money and helped others on a safer way to invest - invest in all stocks (diversify) and stay in for the long term (keep fees low). Bogle emphasizes you can't win paying a middle man and hopping in and out of a market when you don't know the best time. It is a gamble and the odds are against you.
  
  When you invest you need to know (from Keynes) that the long-term expectation for stocks is a combination of enterprise "forecasting the prospective yield of assets over their whole life") and speculation ("forecasting the psychology of the market"). These words were incorporated in Bogle's senior thesis at Princeton. He also notes that accurately forecasting swings in investor emotions is not possible. But forecasting the long-term economics of investing carries remarkably high odds of success.
  
  The stock market is fickle and seldom does one win on speculation. Again and again the book emphasizes to forget the stock market and pay attention to dividend returns and operating results of your companies. Keep your life simple - it is easier to understand and plan.
  
  The takeaways from the book are:
  
  We must start to invest early and continue to put away money regularly
  We know investing entails risk, but not investing dooms us to financial failure
  We know the sources of returns in stock and bond markets, which is the beginning of wisdom
  We know that risks can be reduced by total diversification offered by classic index fund. Only market risk remains
  We know that costs matter, and taxes - and in the long-run best to stay the course to minimize
  We know that neither beating the market nor successfully timing the market can be generalized without self contradiction. What may work for the few cannot work for the many.
  We know that alternative asset classes such as hedge funds aren't really alternative, but simply pools of capital that invest - over or under - in the very stocks and bonds that comprise the portfolio of the typical investor.
  Finally, we know what we don't know. We can never be certain how the world will look tomorrow, or in 10 years. Stay in - glide along the bumps.
  
  

• The Bogleheads' Guide to Investing
• The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing (Little Books. Big Profits)
• A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition
• The Little Book That Beats the Market (Little Books. Big Profits)
• The Little Book of Value Investing (Little Books. Big Profits)