• Skip to content
  • Skip to primary sidebar

Right Attitudes

Ideas for Impact

Book Summary of John Bogle’s ‘Little Book of Common Sense Investing’

January 25, 2011 By Nagesh Belludi Leave a Comment

The Little Book of Common Sense Investing, John Bogle “In investing, the winning strategy for reaping the rewards of capitalism depends on owning businesses, not trading stocks,” argues John Bogle in making a strong case for low-cost index funds in his text, “The Little Book of Common Sense Investing.” With statistics and graphs, Bogle rationalizes that low-cost index funds outperform most investment professionals and offer better-than-average returns for investors over the long term.

John Bogle is the legendary founder of the investor-owned Vanguard Group, currently the world’s largest mutual fund company by total assets under management. Over the course of 25 years at the helm of Vanguard, until his retirement in 1999, he focused the efforts of Vanguard on offering cost-conscious investment choices to the masses. John Bogle is the bestselling author of many other books on investment advice.

Superiority of Low-Cost Index Funds

John C. Bogle, Founder of The Vanguard Group John Bogle founded the world’s first index mutual fund, the Vanguard 500 Index Fund in 1975. Since then, “Saint Jack” (as critics labeled Bogle mockingly) has untiringly promoted the virtues of low-fee, no-load, low-turnover, passively-managed index (or more precisely, index-tracking) mutual funds. Investing in such funds, he contends in “The Little Book,” is the simplest and most effective way to invest in a diversified portfolio of stocks and bonds, and profit from earnings growth of businesses and the dividends they yield.

John Bogle methodically discusses every theme relevant to successful investing: the myths of speculation and market timing, inflation, frictional costs (fees charged by brokers and investment advisors, costs of transactions, front-end and back-end loads,) and the effects of compounding and taxes. He then convincingly counters arguments against investing in total market index funds through easy-to-follow quantitative appraisals of investing in individual stocks and bonds, actively managed funds, hedge funds, and sector-specific funds. At the end of each chapter, Bogle reinforces his position with words of wisdom from some of the greatest minds in economics and investing: Ben Graham, Warren Buffet, John Maynard Keynes, Peter Lynch, and the like.

Invaluable Insights for Investors

The majority of people do not have the time, energy, determination, or aptitude for understanding economics, examining investments, managing risk, and building wealth for themselves. They are either overly cautious, or they invest heedlessly, submit to market trends, or engage in speculation. In reading John Bogle’s authoritative book, modest investors will recognize that low-cost index funds offer them broad diversification, reasonably good returns over the long-term, and the ability to outperform a majority of investment professionals.

Informed investors will find, notwithstanding many drawn-out discussions, a great reiteration of John Bogle’s now-familiar, commonsensical ideas on the merits of index investing.

Leadership Reader’s Bottom-line

  • “The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns,” by John C Bogle
  • Subject: Personal finance, investment advice
  • Required reading for building wealth prudently through investments. The excellent insights in “The Little Book” deserve every investor’s considerations.
  • Recommended topics for further reading: asset allocation, financial planning, and retirement planning.
  • 4 out of 5 Stars

Share this:

  • Click to share on Facebook (Opens in new window)
  • Click to share on Twitter (Opens in new window)
  • Click to share on Pinterest (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Tumblr (Opens in new window)
  • Click to share on Reddit (Opens in new window)
  • Click to share on Pocket (Opens in new window)
  • Click to email this to a friend (Opens in new window)

Related

Wondering what to read next?

  1. Yes, Money Can Buy Happiness
  2. That Extra Salary You Can Negotiate Ain’t Gonna Make You Happy
  3. Is Day Trading and Speculation for You?
  4. You are Rich If You Think You Have Enough
  5. Wealth and Status Are False Gods

Filed Under: Leadership Reading, Personal Finance Tagged With: Books for Impact, Getting Rich, Personal Finance, Simple Living

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Popular Now

Anxiety Assertiveness Attitudes Balance Biases Books Coaching Conflict Conversations Creativity Critical Thinking Decision-Making Discipline Emotions Entrepreneurs Etiquette Feedback Getting Along Getting Things Done Goals Great Manager Leadership Leadership Lessons Likeability Mental Models Mentoring Mindfulness Motivation Networking Parables Performance Management Persuasion Philosophy Problem Solving Procrastination Relationships Simple Living Social Skills Stress Thinking Tools Thought Process Time Management Winning on the Job Wisdom Worry

About: Nagesh Belludi [hire] is a St. Petersburg, Florida-based freethinker, investor, and leadership coach. He specializes in helping executives and companies ensure that the overall quality of their decision-making benefits isn’t compromised by a lack of a big-picture understanding.

Get Updates

Signup for emails

Subscribe via RSS

Contact Nagesh Belludi

RECOMMENDED BOOK:
Stumbling on Happiness

Stumbling on Happiness: Daniel Gilbert

Harvard psychologist Daniel Gilbert shares factual findings that will change the way you look at the world and seek happiness and joy.

Explore

  • Announcements
  • Belief and Spirituality
  • Business Stories
  • Career Development
  • Effective Communication
  • Great Personalities
  • Health and Well-being
  • Ideas and Insights
  • Inspirational Quotations
  • Leadership
  • Leadership Reading
  • Leading Teams
  • Living the Good Life
  • Managing Business Functions
  • Managing People
  • MBA in a Nutshell
  • Mental Models
  • News Analysis
  • Personal Finance
  • Podcasts
  • Project Management
  • Proverbs & Maxims
  • Sharpening Your Skills
  • The Great Innovators
  • Uncategorized

Recently,

  • How to … Plan in a Time of Uncertainty
  • How to … Rethink Work-Life Balance
  • How to … Pop the Filter Bubble
  • Inspirational Quotations #981
  • How to Be Happy, per Cicero
  • Serve the ‘Lazy Grapefruit’
  • Co-Workation Defeats Work-Life Balance

Unless otherwise stated in the individual document, the works above are © Nagesh Belludi under a Creative Commons BY-NC-ND license. You may quote, copy and share them freely, as long as you link back to RightAttitudes.com, don't make money with them, and don't modify the content. Enjoy!

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.