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

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

by John C. Bogle (Author)

The best-selling investing bible offers new information, new insights, and new perspectives The Little Book of Common Sense Investing is the classic guide to getting smart about the market. Legendary mutual fund pioneer John C. Bogle reveals his key to getting more out of investing: low-cost index funds. Bogle describes the simplest and most effective investment strategy for building wealth over the long term: buy and hold, at very low cost, a mutual fund that tracks a broad stock market Index such as the S&P 500.While the stock market has tumbled and then soared since the first edition of Little Book of Common Sense was published in April 2007, Bogle’s investment principles have endured and served investors well. This tenth anniversary edition includes updated data and new information but maintains the same long-term perspective as in its predecessor. Bogle has also added two new chapters designed to provide further guidance to investors: one on asset allocation, the other on retirement investing.A portfolio focused on index funds is the only investment that effectively guarantees your fair share of stock market returns. This strategy is favored by Warren Buffett, who said this about Bogle: “If a statue is ever erected to honor the person who has done the most for American investors, the hands-down choice should be Jack Bogle. For decades, Jack has urged investors to invest in ultra-low-cost index funds. Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me.”Bogle shows you how to make index investing work for you and help you achieve your financial goals, and finds support from some of the world's best financial minds: not only Warren Buffett, but Benjamin Graham, Paul Samuelson, Burton Malkiel, Yale’s David Swensen, Cliff Asness of AQR, and many others.This new edition of The Little Book of Common Sense Investing offers you the same solid strategy as its predecessor for building your financial future.Build a broadly diversified, low-cost portfolio without the risks of individual stocks, manager selection, or sector rotation.Forget the fads and marketing hype, and focus on what works in the real world.Understand that stock returns are generated by three sources (dividend yield, earnings growth, and change in market valuation) in order to establish rational expectations for stock returns over the coming decade.Recognize that in the long run, business reality trumps market expectations.Learn how to harness the magic of compounding returns while avoiding the tyranny of compounding costs.While index investing allows you to sit back and let the market do the work for you, too many investors trade frantically, turning a winner’s game into a loser’s game. The Little Book of Common Sense Investing is a solid guidebook to your financial future.

In his book, "The Little Book of Common Sense Investing," John C. Bogle, the founder of Vanguard, dispels the myth that investing is a complex and risky endeavor only accessible to the wealthy and well-connected. Bogle argues that ordinary investors can achieve extraordinary results by following a simple, disciplined approach to investing.

Bogle's philosophy is based on the belief that the stock market, over the long term, will always deliver positive returns. However, he cautions that investors should not expect to beat the market consistently. Instead, they should focus on building a diversified portfolio of low-cost index funds and holding them for the long term.

Bogle provides clear and concise instructions on how to implement this strategy, including how to choose the right index funds, how to allocate your assets, and how to rebalance your portfolio over time. He also discusses the importance of staying invested during market downturns and avoiding the temptation to make emotional investment decisions.

"The Little Book of Common Sense Investing" is a must-read for any investor, regardless of their experience level. Bogle's wisdom and insights will help you navigate the complexities of the stock market and achieve your financial goals.

Here are some key takeaways from the book:

  • The stock market is a long-term game. Don't try to time the market or pick individual stocks. Instead, focus on building a diversified portfolio of low-cost index funds and holding them for the long term.
  • Don't pay attention to market noise. The stock market is volatile, and there will always be ups and downs. Don't let these short-term fluctuations影响 your long-term investment strategy.
  • Stay invested during market downturns. It's tempting to sell your stocks when the market is down, but this is the worst thing you can do. Instead, stay invested and ride out the storm. The market will eventually recover, and you'll be glad you didn't sell.
  • Rebalance your portfolio regularly. As your investments grow, you'll need to rebalance your portfolio to ensure that your asset allocation remains aligned with your goals.
  • Keep costs low. Investment costs can eat into your returns over time. Choose low-cost index funds and avoid high-fee active management funds.