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

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.

I have experience investing at the retail level and consider myself a knowledgeable but highly typical retail American investor. I started from zero and believe in personal responsibility, self reliance and I firmly believe SS is going to shift to a welfare program and because of that belief I plan on needing my own money for a retirement that is to involve anything in addition to sitting home and waiting on a government check to barely cover the groceries. I am also a victim of class warfare perpetrated through our current political class and feel a sense of urgency in protecting my future from the witless and covetous hordes at the gate. I invest what I can for my personal wealth advancement, to pay for my children's education and for my retirement. All that I have learned comes from educating myself and through experience.In my quest for independence I have recently been working on asset allocation fine tuning but also on simplifying my investments for ease of management. This book was a home run. What John Bogle preaches (and I do mean preaches) is that owning the major markets in their entirety is a better strategy than trying to pick individual stocks and a far better strategy than allowing some 'advisor' to chip away at your principle via expenses. Even mutual funds can chip away principle through expenses. The simple analogy given by Bogle is "instead of looking for the needle in the haystack, buy the haystack". He is a 'buy and hold through low cost indexes' disciple. That sums up the thirty thousand foot view of the book but it is worth reading so he can make his case, and make his case he does. Unless you did not know it already, John Bogle is the father of mutual funds and one of the founders of Vanguard. Yet, he even offers some fair criticisms of today's mutual fund industry.After reading his book I applied much of what John Bogle proffers into my asset allocation strategy and have shifted nearly all of my long term investments into one low cost mutual fund company where asset class diversification is available,where expenses are low, turnover is low and I can see and manage everything from one simple dashboard. Rebalancing, adding to an allocation and the simplicity of doing so was worth the price of the book itself, especially when you see how the author details the method of collecting expenses by the financial industry.There are no populist boogie men in this book and there are no get rich quick schemes, no pretense that Bogle knows how to better time the market and no pretense that all financial planners are evil doers hell bent on destroying the little people. As for the last point, he rightfully leaves those charges to be leveled by the opportunist politicians to the low information voter.

I love inviting. This is one of the very best books I have read. It helped me tremendously, and I have use these principles in my investment strategy.