This book was purchased as a gift for my dad who is a big investor and always up on the lastest news on investing. I would recommend this book to anyone who is of similar interests.

200 pages on why to buy index funds.Much too repetetive.Each chapter was basically the same.

The Little Book of Common Sense Investing is ideal for somebody who doesn't invest for a living. Being a professional investor requires a lot of knowledge, time to research, and some luck. People managing their own finances often don't have the time or resources to compete with professionals. That's where Common Sense is useful. It provides an investing strategy that won't produce a lottery-like gain but will mathematically provide the best returns for the average investor.

The one caveat is that it uses "only" 80 years of financial data. With most data sets, 80 years is statistically significant. However, the United States economy is highly complex. This isn't necessarily my opinion, but opponents have said that the data from this book occurred due to innovation like automobiles, electronics, computers, and more. If true, this view would dictate that new innovation would be needed for the same results to occur again.

With that said, this book has solid information for people trying to manage their personal finance.

This book provides a compelling argument that for the average investor, indexing is the best option. The core of Bogle's argument is that the gross return of the average mutual fund must match the return of the index. The net return is significantly worse due to the higher fee structure. Although the information is interesting and factual Bogle drags out what should have been a three chapter book into eighteen chapters. The presentation is also a biased with only Bogle/Vanguard products presented in a favourable light. For example although he repeatedly the quotes Warren Buffett no mention is made of the fact that Buffett and his famous superinvestor peers have repeatedly beaten the index over a significant period of time. Also no mention is made of the fact that it is possible to construct a "do it yourself" portfolio that moves in virtual lockstep with the index using far fewer stocks. This direct portfolio would mirror the index with zero yearly costs, the lowest fee structure possible! Alas since it is not a Vanguard product no mention of it is made in the book. A recommended read although I would keep in mind that the information is selectively crafted to show Vanguard products in the most favourable light.

This book is simply and well written by a man who knows what he is talking about and has had undeniable, demonstrable results for some time now.If you know anything about investing you've heard of Vanguard.It's about a different philosophy and practice re. investments.Different from the vast majority of financial managers and advisors that we entrust with our financial futures today.His advice is simple but it's not easy because it runs counter to conventional wisdom and everything that I thought I knew about investing.Without trying to rewrite the book here, I'll just say that it may be the beginning of a very different and more prosperous future for you if you have the wisdom to heed his advice.

If you don't know what index investing is, or if you do and you're not practicing it, you should probably read this book. It was written by the man that invented the practice of indexing and he's been thinking and working on the subject his entire adult life (and he's old). His writing style is casual and quick to read. Unless you don't understand it, this book will probably turn you into an index investor.

If, on the other hand, you don't need to be convinced of the merits of index investing, skip this book. It is just chapter after chapter, hammering home why almost everything other than indexing is inferior. Although I did understand a few things better after reading this book, it was interspersed with too much material that is very familiar to me, and will be to you too, if you've read any investment books written by people that agree with Bogle.

I can sum up this book in two words "Index Fund".
The author argues that on almost nobody can beat the market consistently and that fees eat up a big chunk of people's profits. So investing in the low fee Index fund that tracks the entire US market is the best deal. Invest early and often.

The philosophy behind this book boils down to:

* Own a diversified portfolio of stocks via index funds
* Hold long-term
* Do not try to beat the market

This investment strategy should be used by the majority of the population. Even Warren Buffett thinks so. This philosophy eliminates certain risks, provides tax efficiency, has low costs, and requires no research. It is the lazy person's approach, and there is nothing wrong with being a lazy investor especially if you don't have time to do your own research.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

Bogle believes that successful investing is all about common sense. He made his name as the founder in 1976, of the first ever stock market index fund, the Vanguard 500. In 2004 TIME magazine included him as one of the world's 100 most powerful abnd influencial investor. As the founder of the world's first index fund, Bogle, of course has a vested interest in promoting this type of investing. But, he supplies plenty of evidence from academics and major figures in the finance world to support his cause. These include: (1). Peter Lynch, legendary manager of the Fidelity Magellan Fund, noted in Barron's magazine that mutual fund performance was getting worse, and that "The public would be better off in an index fund".; (2),. Warren Buffett's partner in Berkshire Hathaway, Charlie Munger, is quoted as saying: "The poor guy in the general public is getting a terrible product from the professionals"; (3). Tyler Mathison, editor of Money magazine, having been critical of "boring index funds like Bogle, has admitted he was wrong: "Gunning for average is your best shot at finishing above average...Indexing should form the core of nost investors' fund portfolios".

This book confirmed my faith in John C. Bogle and his integrity and simple common sense infesting.

Excellent book & I would highly recommend it to anyone novice or expert, no matter what your investments have been. A little repetitious at times. A must for everyone

How is that considered safe? The S & P 500 was over 1270 in June of 1999, and is currently near 920, 10 years later...down, 20+ %

The fact is markets do go down, and often times stay down. If one owned the Nasdaq index in the year 2000 at 5000, they are still down over 60% 9 years later.

The Japanese Nikkei index is still down OVER 80% 20 years later.

There is no guarantee that markets rise over time. If it were that easy, we would all be stock market millionaires, but statistically few are.

INDEX INVESTING DOES NOT ADDRESS THE SINGLE MOST IMPORTANT ASPECT OF MONEY MANAGEMENT - RISK MANAGEMENT.

Before you scoff at the facts, do some research, google or wiki, on Bruce Kovner, John Paulson, Michael Marcus, John Henry (Owner of the Boston Red Sox), Monroe Trout, William Dunn, George Soros - all of them "market timers", and "stock pickers" - and all with net worths in the hundreds of millions and billions - literally.

It is a nice sales pitch to tell people that market timing doesn't work, just keep putting money blindly into the financial markets with no risk management strategy.

The financial markets are serious business, and the fact is that the uninformed majority's losses pave the golden road for the few who truly understand that markets do not always "go up".

The fallacy of "buy and hold" index investing has been exposed as ridiculous as the day trading tow truck driver commercials of the late 90's. What exactky is the plan of the index investing crowd for declining markets??

If one owned the Nasdaq index in the year 2000 at 5000, they are still down over 60% 9 years later.

The Japanese Nikkei index is still down OVER 80% 20 years later. Fact...so does index investing really work, or is it just a clever way to "sell" index funds.

Index investing is the King of all financial "sales-pitches" that mislead the uninformed majority...Index investing only works in bull markets, period...A superior investment strategy provides absolute returns, in all market conditions.

Index investing does not tell investors what to do when markets decline..."OK, sit tight, or buy more!" Are you serious. "Just hold on the markets always come back"...do they?

10 years later the S & P is down over 20%

The author has an angle to pitch, which has built Vanguard into a mutual fund giant, which is great for Vanguard, but how have their customers actually done?

Index investing is a great "sales-pitch" - don't let high priced brokers, etc. take your money, when the index fund company can take your money instead.

With the S & P index fund down over 1, 3, 5, and 10 year periods have the fund companies refunded the fees they charged investors to manage the funds? Absolutely not.

As a champion of the investor, why should the author's company make money if their investors are losing money.

It is comforting for the unsuspecting investing public to believe that index investing is a "better, nobler" way, but the numbers do not lie.

Market timing absolutley works, active management absolutley works, but then folks would have to admit that it isn't as easy as this author would make you think it is to make money investing.

This author would have people believe that markets are efficient and that buying assets on the way down is a wise investment choice...How is any investment with negative returns for the rolling 1, 3, 5, 10 year period a good investment? It isn't

Index investing is a bill of goods sold to the unsuspecting public...

If "stock-picking" and "market-timing" don't work explain that to hedge fund managers who shorted the indexes to gains last year, and are profitable again this year in a rising market...

To truly participate profitably in the markets one needs to understand how to profit in rising and decling markets...

Let's not confuse brains with a bull market..Let's see the stats for index investing over the last 10 years, not very inclined to sell alot of index funds...

Bottom line, if market timing doesn't work, ask where index investors would be if they sold 2 years ago, and more importantly didn't buy all the way down...

Not a very popular stance, but the facts are the facts - the author is right about one things - financial firms all have a sales pitch to get your money, including the author's company - they are all cut from the same cloth, some arrive in different packaging though.

BUYER BEWARE...

This excellent investment primer left me confident in my ability to invest wisely in both equities and bonds. Buy the haystack rather than trying to find ther needle and adroitly eliminate the middleman.

This an investment book you can read in an afternoon. Essentially an argument that buying low cost index funds is more efficient and earns a better return over trying to beat the market 99% of the time, it is well argued and persuasive. It is not intended to teach you everything about investing. It is simple and to the point: buying low cost index funds is a superior investing model for virtually everyone. Weather or not you agree with the premise, this is a frank, funny, and well written guide to index fund investing, and aside from some plugs for Fidelity funds which are not overly distracting, it's a great little book. Don't use it as an investment Bible; that would be overly simplistic. Do, however, learn from Bogle's point of view even if you do steer towards being in more direct control of your portfolio.

4/5 Stars. Well worth the time to read.

I absolutely love this little book. It's what people like Warren Buffett, Benjamin Graham, and Peter Lynch have been saying for years (and Bogle too in other books). Basically it boils down to you'll make as much from your investments in companies as the companies earn in profits over the long-term less transaction costs, taxes, etc. Bogle points out the folly of trying to time the market, the costs of churning your portfolio, in both commissions and taxes. He also advocates broad based index funds, which I would say is probably right for every investor who doesn't have the time or interest to investigate individual stocks. He also encourages the use of dollar cost averaging which benefits investors so much over the long-term!

Bogle also points out the problems of forecasting the future exclusively by looking to the past. It's been used as a justification in housing that prices never go down, various hedge fund strategies, etc. The problem is back in the past, housing prices never went up by 10-20% a year nor did we have hedge funds moving money around by clicks on a keyboard like we do now. The past is a guide but not a guarantee by any means.

Overall, a simple book, a wonderful book, and if the investors of Bernie Murdoff had read this book, they probably wouldn't have lost $50 billion!

Over the past year, I have read 7 of the "Little Book of common sense Investing", and this is by far, the one that makes the most sense. All of the other books describe how to pick winning stocks, value stocks, diversification, and other "tricks" to winning in the market (and by my experiences, none of them work). This book, talks about "Index Funds" that track the broad markets like the S&P 500, and how safe and economical that strategy is in the long run.

I agree 100% with the author's work, especially for the average 401k investor who doesn't have time to "play the market". Especially when you factor in the fees associated with buying and selling individual stocks, and using other Funds that have high management fees associated with them.

Summary (To save you time):
If you want to retire early and financially wealthy you'll go a long way to beat this book. your first investment should be this book and then the markets. John Bogel provides a clear and concise text on how to make a good (If unexciting) return.
This book is accessible, factually based, informative and small enough to read quickly. There is no heavy analysis or huge amount of brain power required.


Review:
What makes a good investing book? It always seems to be the promise of riches and excitement. Well good luck most of the exciting stock picking methods lead to bankrupcy.
What should make a good investing book? Hows about something that can actually work?
Please bear in mind at this point that if a stock picking method cannot be rationaly explained as to why it works the chances are its garabge. One method that was well explained is Value Investing. Unfortuantely these days you are up against computers that can analyse all world wide stock markets in real time - chances are you won't win.

In a market of hype about the "Latest" and "Greatest" stock picking method John Bogel has written a book based on common sense. Inevitably all investors in a market must on average gain returns equal to the market, less costs (Forget these at your peril).
In recent years Wall Street has made $400 Billion per year in those costs (Thats right they won and you lost before your money even went into stocks). Hows about keeping that money and still investing and getting a fair (Average) share of returns? Sound boring? Well the best way isn't always the most exciting.

Through humble arithmatic John Bogel convinces you of the value and sense in a low cost index tracking fund.
Each chapter finishes whith people who endorse indexing. The likes of Warren E. Buffet, Charlie Munger, Charles Schwab, etc (Who all know more about investing than I ever will) endorse indexing. Thats good enough for me.

As a quick explanation of the aritmetic (I made these numbers up, they're not from the book, but they are mathematically accurate) and why it should convince you:
Assume the stock market returns 10% per year, you have 100% portfolio turnover per year, 2% costs (Very low) and 40% taxes (which is about right in GB where I live). If you have a system to beat the markets you need a return of 10% or more as well. So 10% return + 2% costs + 40% taxes =
(10 + 2) / 0.6 = 20%. Well good luck! Your system needs to double market returns. Hint: One reason Warren Buffet is able to beat the markets is he has very low portfolio turnover (Thus avoiding many taxes).

So are there down sides to this book?
Well Yes, there always are. Inevitable John Bogel uses the Vanguard S&P 500 index tracker (From his own company) as an example. He mentions others but not very often. So it sometimes feels a little like a sales exercise in places. However never so much that it detracts from the point. And I am a cynic who is always looking to disprove (Or even disapprove) of what I read.
Also indexing doesn't offer you very much excitment. However I can counter that with I want to retire early, not late (And broke) in life knowing I had fun in the markets.
Lastly I haven't read all the books out there and there may well be better for me yet to discover. As far as I personally have read this book tops the list though.


Resummary:
Not exciting but so well worth the money, unlike most of the garbage out there. As for most stock picking methods please remember you are taking on the best and brightest on Wall Street and their computers. They still lost huge regularly (In recent years lets all remember 2000-1, 2003, 2007-8, each time we witnessed in the region of a 40% crash in the markets). If they fail why can you or I do better? I'll stick to boredom and a fair return.

As a final endorsement of what John Bogel writes about, when companies make investments that they have to all but guarantee returns on (Pensions etc), they invest in the manner described in this book. They just don't advertise it, but if you want a good safe return guess what...

So as not to leave anyone in suspense, according to the author the "only way to guarantee your fair share of stock market returns" as it says in the title of the book is to invest in index funds that mirror the broad market, such as an S&P 500 fund. Plain and simple.

Basically, Mr. Bogle lays out his argument for that viewpoint in several relatively short, easy-to-understand chapters that each focus on a separate aspect as to why index funds are the vehicle of choice for the long term investor. He provides the reader with supporting historical data, information about fees, income tax effects, quotes from other respected investors, etc., to build a strong case for index funds. The effect of what you may think are slight differences in fund fees and charges from one fund to another over time are quite shocking.

Overall, this is a well-written, organized, intelligent book that is also thankfully concise, and I thought it was well worth reading. I can see there is a lot of wisdom for sticking with index funds for the long run.

An excellent book on investing. Straightforward form people whom know what they are talking about. And quoting from other good references as well.

As others have mentioned, this book could be distilled down to "The only way to succeed at long term investing is to buy low-fee mutual funds that track the whole stock market". The entire rest of the book is the justification, and it's pretty hard to argue with any of it. Sure, you can beat the market sometimes, but it can't last.

As a beginning investor, I found the book informative - it helps you think about stocks and the market in ways that aren't immediately obvious to the uninformed.

I love this book. Gave it to my nephew who was content to lose money for 20 years and get into sector funds to make his riches later.

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits)I thought this book was very clearly written, and its advise quite compelling. It hammers home the long-term advantages of investing in index funds. Of course, the author sells them for Vanguard, but none-the-less, his advise makes sense. He points out how difficult it is to select a mutual fund which consitently beats the market average over a long time period. According to the book, the odds are stacked heavily against it. So I think his point is for me to let go of my ego, and admit how extraordinarily difficult it is to beat the averages, and just invest in index funds and let it ride. Piled with fact after fact, lots of statistics, and bare logic, the book makes its case superbly. I recoommend it to all who own or plan to own stocks or bonds.

Jack Bogle has written a book for the ages...in simple language with illustrations that are easily understood, he makes a compelling case for index investing. This is the single critical volume of knowledge that the typical investor will ever need.

I have been reading about investing since the current market down turn began, including several other books by John Bogle, founder and ex-CEO of the Vanguard Group. This slim volume makes the case once again for investing in low cost indexed mutual funds rather than trying to beat the market, which most of the professionals fail to do. This book is perfect as a refresher course, or for your significant other who is too busy (or too intimidated) to read more detailed books on investing.

I'm 29-going-on-30 and wishing that I had absorbed the wisdom imparted in this book when I first signed up for a 401k. But here I am, seven years later, finally having a real understanding of where I should stash my retirement nest egg.

The premise behind this book is simple - index funds have proven to be the wisest vehicle to throw your money in to achieve long-term profits. Bogle does an excellent job of explaining why this is, utilizing the "humble arithmetic" behind his thesis. For those who are like my old self and unsure of the best way to invest your retirement savings, look into low-cost index funds. And don't just throw your money in there...purchase this book and understand WHY you should.

I rec'd the book safely, in good condition, but haven't yet had a chance to read it.

Bogle presents his theory on investment and the evidence gathered over the years which backs it up. The theory is simple - own the whole market by buying index funds, OR be prepared to do a ton of in-depth research just like a full time investment advisor. He backs up this "bi-polar" recommendation through the evidence gathered on where casual investors loose out, such as market timing, advisor fees, etc.

As interesting as Bogle's research is, it gets pretty tiring listening to him toot his own horn. Minus one star.

Also, I would recommend borrowing / renting this book (or the audio CD). Once you understand why index funds are "the choice" for the casual investor, the book really doesn't offer any other detailed advice or re-read appeal. Your next stop should be a book such as Jane Bryan Quinn's "Smart and Simple Financial Strategies for Busy People."

This is an excellent book for any investor. The straight common sense advice that this book provides will help everyone with their investment portfolios. The best quote from the book is "the miracle of compounding interest is overwhelmed by the tyranny of cost". Through index funds, the author explains how to cut costs and caption the return of the entire stock market. This is an excellent book.

To anyone even remotely serious about investing, this book is MUST reading. Simple to understand and very clear in its message-most folks are on the losing end of their stock investments. Very clearly Bogle makes the case for inexpensive index funds which mathematically have proven very solid returns while minimizing the tax impact, advisor fees and trading fees that every investor faces. By following his straight-forward advice, virtually anyone can overcome the failures of the vast majority of investors and ill-advice of most brokers/planners and reap solid rewards.

Mr. Bogle has done more to help the common investor than anyone. This book is a must read for anyone new to investing. It will be the only book you will need to read to have a good understanding of how to invest effectively. It is a condensed version of Bogle on mutual funds and easier to read.

By the end of this book, it really will be common sense to you that investing in index funds is the best idea for your retirement. The facts are laid out and the point is hammered home. You certainly can't go wrong with the advice contained in this book.

However, if you desire a little more excitement (and potential returns) in your investing adventures, you will want to broaden your horizons a bit more.

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

This is a fine book for most investors. It is easy to read and gives the reader an investment philosophy which will be invaluable if followed in the future. I recommend this book highly.

I liked this book a great deal, and found it very informative. I have changed the way I invest because of this book. I recommend it highly.

In the introduction it is stated that: "Only stock market risk remains." (if you invest in index funds). The "Only" should have been been a big BUT. On page 69 Mr. Bogle writes: "Common sense tells us that we are facing an era of subdued returns in the stock market." This would have been a good place to add that index funds could in fact also guarantee you your fair share of devastating loses for a decade or two. It has happened before.
In 1990 the Japan Nikki 225 was about 40,0000. 13 years later in 2003 it was about 8,000. A decline of 80%. In 2008 it has increased by 62% to about 13,000 but still down a stunning 68%, 17 years after the peak in 1990. And here and now in America the stock market, index funds and all, is trading where it was nine year ago. The S&P 500 - stock index finished at 1352.99 on March 25, 2008, below the 1362.80 it was in April 1999. Since 1999 gold has had an annualized total return on investment of 14.51% and real estate (REITs) 14.11% (see March 26,2008 WSJ for more details). A recession and stagflation could could cause the decline to go on and on but no one knows. During the Great Depression stocks lost 90% of their value and then took 25 years to recover.
This is a fine book but the focus on just stocks and bonds, common sense should tell you is too narrow. It makes sense to be more broadly diversified. Hard assets like gold and sensibly priced (monthly rent 1% of price) income property that will protect you when index funds continue to let you down down down.
Today when I become a little sad from looking at how my index funds are doing I get cheered by reading my property manager's report about my investment in half a dozen condominiums (in fact they make me so happy I wrote a how-to book about them) and by looking up the price of gold.

In the introduction it is stated that: "Only stock market risk remains." (if you invest in index funds). The "Only" should have been been a big BUT. On page 69 Mr. Bogle writes: "Common sense tells us that we are facing an era of subdued returns in the stock market." This would have been a good place to add that index funds could in fact also guarantee you your fair share of devastating loses for a decade or two. It has happened before.
In 1990 the Japan Nikki 225 was about 40,0000. 13 years later in 2003 it was about 8,000. A decline of 80%. In 2008 it has increased by 62% to about 13,000 but still down a stunning 68%, 17 years after the peak in 1990. And here and now in America the stock market index funds and all are going down down down and when it will stop no one knows. A recession and stagflation could could cause the decline to go on and on but again no one knows. During the Great Depression stocks lost 90% of their value and then took 25 years to recover.
This is a fine book but the focus on just stocks and bonds common sense should tell you is too narrow. It makes sense to be more broadly diversified. Hard assets like gold and sensibly priced (monthly rent 1% of price) income property that will protect you when index funds continue to let you down down down.
Today when I become a little sad from looking at how my index funds are doing I get cheered by reading my property manager's report about my investment in half a dozen condominiums (in fact they make me so happy I wrote a how-to book about them) and by looking up the price of gold.

This book provides much evidence supporting the use of broadly diversified Index Funds as a primary means of investing for the long term. By following the advice in this book, you will very likely earn more than the average mutual fund investor and spend less time managing your investments. The book is a little redundant in its message, but the advice is valuable. I would also recommend the book "The Only Investment Guide You'll Ever Need" by Andrew Tobias.

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

The book is absolutely the single, best book for most investors. I gave a copy to each of my three adult sons and told them this was the only book they would have to read to "do well" investing.

As Warren Buffett said man has a perverse habit of making simple things complex. Everyone who already invests or intends to invest must read this book. The book is well written and not heavy with any esoteric investment concepts. Sometimes it may seem like a bit repetitious, but that I believe is necessary. This is because sometimes one cannot see the obvious and the facts must be repeated to drill it in.

To some who do their extensive 'research' and pick the 'right' sectors, fund managers, stocks etc this book may seem too simplistic. Believe me, I was one like that more than a decade back. The bull market of 90s and the subsequent bear market of early 2000s and a lot of common sense reading has taught me enough. Now I have most of my and my wife's 401Ks, taxable account, my son's 529 in portfolios of index funds.

Who says indexing is boring. It is not. The real fun is comparing the index portfolio performances with actively managed fund portfolios after taking into consideration the costs, taxes and fees.

I would also recommend "The Four Pillars of Investing" by William Bernstein and if you are mathematically oriented "The Intelligent Asset Allocator" by the same author.

A little off topic: You may also want to read "Buffett: The Making Of An American Capitalist" by Roger Lowenstein. This book is not directly related to indexing, but one gets a decent understanding of the mind of the greatest investor (and also a great human being) that has ever walked on this planet. Unless you are one like Warren Buffett, stay with index funds.

Estoy leyendo este libro y me parece genial es la misma receta de los autores que creen que los mercados son eficientes podria decir que es tan bueno como cualquier libro de Malkiel sin embargo quiero decirles algo, seguramente estos autores tengan razon en lo que dicen pero le quitan la magia al juego, leer este tipo de libros es como ver los trucos de todos los magos, simplemente la inversion pierde su chiste, su sazon.

Definitivamente te lo recomiendo, metaforicamente hablando es del tipo de libros que te explican que la comida chatarra es basura y que lo que importa son las ensaldas, el atun, las proteinas etc. a fin de cuentas sabes que tienen razon, pero y que pasa con esos sitios secretos del comer delicioso que has encontrado durante un largo andar por la vida?

La leccion es: renuncia a todo eso, come bien y viviras muchos años mas.

Compralo no te arrepentiras !!!

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?

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?

Bogle's book provides great advice for those seeking low maintenance, low risk investments. This is a book that I wish I had gotten my hands on years ago, but it's practical advice for all ages. Bogle is able to dumb down the merits of index fund investments so that most minds, regardless of their financial IQ, can comprehend his arguments.

Book explains how to recover what is ours from the world of business. I wish I would have read it 20 yrs. ago. Explains how Harvard and many large endowments invest. Why pay a broker 70% of the income from growth and dividends for a 10% chance of beating a stock index when you can buy the indexes for 0.2% in yealy fees.

Great book for newbies (and others too) wanting to learn about investing, especially INDEXING. I enjoyed it thoroughly! John Bogle does an excellent job explaining the simplicity and benefits of INDEX FUND investing.
The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Book Big Profits)

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.

This book gives one the fundamental rules of investing in the safest manner possible using the 500 S and P Index fund and the least cost.The book is not for seculators but for long term investors . It is a very readable book and covers basic terms without the need to go to more analytical tombs.I must say that the author whom I have read in the past is very repetitive and could well have said the same in half the nunber of pages.

In this book, John Bogle makes a case for low cost index mutual funds as a good investment. The case is built on solid logic and the book is definitely worth a read, not only if you are interested in index mutual funds, but also to awaken you to the pitfalls of active fund management.

Regarding Exchange Traded Funds (ETF's) I would not completely dismiss them in favor of index mutual funds. If used correctly (with discipline and not traded continually) a low cost ETF could give you as good a return if not better than an index mutual fund.

I would also highlight the danger of assuming that an index fund can be bought at any price and then held for years to make a good investment. It is not explicitly discussed, but worth considering that when the market is at its most speculative, the index is likely to be high and could fall dramatically in the future. Also, when a particular stock is at its most speculative, by definition it occupies a greater part of the index (and hence the index fund), which is also a danger.

Overall the book is an easy, quick, good read that will highlight issues in fund management.

So much common sense about investing from Mr. Bogel. His approach is easy to follow and, based on his track record, an approach to use the miricle of compounding that will work.

Mike Hammel

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.