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Common Sense on Mutual Funds by John Bogle is a substantial book It is quite long Reading the newest version, the 10th anniversary edition, adds plentiful commentary, making this even longer Bogle likes to offer as complete an argument as he can for low cost index funds, and I personally found it quite a bit beyond what I was expecting I enjoyed the voice of the author He presented his information in a casual manner, although with quite a bit of repetition Perhaps it wasn t exactly repet Common Sense on Mutual Funds by John Bogle is a substantial book It is quite long Reading the newest version, the 10th anniversary edition, adds plentiful commentary, making this even longer Bogle likes to offer as complete an argument as he can for low cost index funds, and I personally found it quite a bit beyond what I was expecting I enjoyed the voice of the author He presented his information in a casual manner, although with quite a bit of repetition Perhaps it wasn t exactly repetition, perhaps it was describing nuances to his arguments This was for completeness, but hurt readability And with this 10th anniversary edition, the author decided that every few pages or minutes on the audiobook , he would break in with an update These were often interesting, with Bogle saying how correct he was, or in some instances how wrong he was in his predictions of where the mutual fund industry would be I listened to this on audio, and the problem with these update sections was that they were introduced by the narrator saying something like Ten year update, but there was no indication when the update was over and you were back listening to the original book This would have been a good place to have a second narrator to help the listener understand If you are a well informed investor, you probably know a lot of the rules of efficient investing, like purchasing low cost mutual funds, and investing in index funds instead of actively managed funds This book really provides the detailed background on how those rules came about, and not muchOverall this is a good review of the economics and the business of mutual funds, and it provides the backgrounds into efficient stock and bond investing It provides a lot of information, in some ways overwhelming I recently finished reading Common Sense on Mutual Funds New Imperatives for the Intelligent Investor by John C Bogle.Below are key excerpts from this book that I found to be insightful Investing is an act of faith We entrust our capital to corporate stewards in the faith at least with the hope that their efforts will generate high rates of return on our investments When we purchase corporate America s stocks and bonds, we are professing our faith that the long term success of the U.S e I recently finished reading Common Sense on Mutual Funds New Imperatives for the Intelligent Investor by John C Bogle.Below are key excerpts from this book that I found to be insightful Investing is an act of faith We entrust our capital to corporate stewards in the faith at least with the hope that their efforts will generate high rates of return on our investments When we purchase corporate America s stocks and bonds, we are professing our faith that the long term success of the U.S economy and the nation s financial markets will continue in the future To state the obvious, the long term investor who pays least has the greatest opportunity to earn most of the real return provided by the stock market In my view, market timing and rapid turnover both by and for mutual fund investors betray both a lack of understanding of the economics of investing and an infatuation with the process of investing My guidelines also respect what I call the four dimensions of investing 1 return, 2 risk, 3 cost, and 4 time When you select your portfolio s long term allocation to stocks and bonds, you must make a decision about the real returns you can expect to earn and the risks to which your portfolio will be exposed You must also consider the costs of investing that you will incur Costs will tend to reduce your return and or increase the risks you must take Think of return, risk, and cost as the three spatial dimensions the length, breadth, and width of a cube Then think of time as the temporal fourth dimension that interplays with each of the other three For instance, if your time horizon is long, you can afford to takerisk than if your horizon is short, and vice versa Rule 1 Select Low Cost FundsRule 2 Consider Carefully the Added Costs of AdviceRule 3 Do Not Overrate Past Fund PerformanceRule 4 Use Past Performance to Determine Consistency and RiskRule 5 Beware of StarsRule 6 Beware of Asset SizeRule 7 Don t Own Too Many FundsRule 8 Buy Your Fund Portfolio And Hold It No matter what fund style you seek, you should emphasize low cost funds and eschew high cost funds And, for the best bet of all, you should consider indexing in whichever style category you want to include There are three major reasons why large size inhibits the achievement of superior returns the universe of stocks available for a fund s portfolio declines transaction costs increase and portfolio management becomes increasingly structured, group oriented, and less reliant on savvy individuals Four principal problems are created by this overemphasis on marketing First, it costs mutual fund shareholders a great deal of money billions of dollars of extra fund expenses which reduces the returns received by shareholders Second, these large expenditures not only offer no countervailing benefit in terms of shareholder returns, but, to the extent they succeed in bringing additional assets into the funds, have a powerful tendency to further reduce fund returns Third, mutual funds are too often hyped and hawked, and trusting investors may be imperiled by the risks assumed by, and deluded about the potential returns of, the funds Lastly, and perhaps most significant of all, the distribution drive alters the relationship between investors and funds Rather than being perceived as an owner oi the fund, the shareholder is perceived as a mere customer of the adviser.On a closing note, on leadership To wrap up this litany, I put before you both tentatively and humbly a final attribute of leadership courage Sometimes, an enterprise has to dig down deep and have the courage of its convictions to press on, regardless of adversity or scorn Vanguard has been a truly contrarian firm in its mutual structure, in its drive for low costs and a fair shake for investors, in its conservative investment philosophy, in market index funds, and in shunning hot products, marketing gimmicks, and the carpet bombing approach to advertising so abundantly evident elsewhere in this industry today Sometimes, it takes a lot of courage to stay the course when fickle taste is in the saddle, but we have stood by our conviction In the long run, when there is a gap between perception and reality, it is only a matter of time until reality carries the day.A recommended read in the areas of investing and leadership This is the newest edition of one of the best investing books I ve read I was curious to hear Bogle s thoughts on the recent economic situation, and his reflections on his sage advice ten years earlier The last ten years, although totally unprecedented and unpredictable, have certainly borne him out.This book doesn t actually talk much about the stock market or asset allocation It talks specifically about the mutual fund industry This book doesn t give the standard lines about beating the ma This is the newest edition of one of the best investing books I ve read I was curious to hear Bogle s thoughts on the recent economic situation, and his reflections on his sage advice ten years earlier The last ten years, although totally unprecedented and unpredictable, have certainly borne him out.This book doesn t actually talk much about the stock market or asset allocation It talks specifically about the mutual fund industry This book doesn t give the standard lines about beating the market and picking mutual funds It s even unique among books about passive investing in that it doesn t talk much about asset allocation and Modern Portfolio Theory.What it does is incessantly rip into traditional mutual funds, particularly their cost structure The first part explains all the ways costs matter I found my jaw dropping a few times during this part I already agreed with him, and yet, I was astonished I knew that costs matter, but I had no idea that they mattered to that extent I used to believe high costs are justified in some cases, but after this book, I really understand that even small differences in cost make an enormous difference long term Later, the book discusses how mutual funds are organized and how they subtly deceive shareholders It seems downright fraudulent, and Bogle agrees All along, he never fails to offer an alternative index funds.I was grateful that the book ended with a mini autobiography, and an explanation of how Vanguard works, which is the company he founded This man is a crusader, a hero, practically a saint among the investing community He had the guts to stand up against an enormous industry that was complicit in ripping off their shareholders Bogle was a promising mutual fund executive at a very young age, and he could have increased his fortunes by several orders of magnitude Even though he certainly did very well for himself, he was clearlyinterested in sticking up for the investors than in taking their money His company, Vanguard, is very unique They re owned by their fund shareholders, have practically no marketing budget, operate at cost, and will turn away money if taking it would not be in the best interests of their shareholders Easy there John Bogle, save a few pats on your back for me I really enjoyed this, but its not for everyone It does have a lot of dense information proving its point The point Investing in low cost all market passively managed index funds for the long term is what you should do.If you need some one to prove it to you, then read this book By about the 5th chapter Bogle will convince you of this, then he ll continue to take this fact and beat you over the head with it for the remainder of the b Easy there John Bogle, save a few pats on your back for me I really enjoyed this, but its not for everyone It does have a lot of dense information proving its point The point Investing in low cost all market passively managed index funds for the long term is what you should do.If you need some one to prove it to you, then read this book By about the 5th chapter Bogle will convince you of this, then he ll continue to take this fact and beat you over the head with it for the remainder of the book with tons of percentages and math and charts It really is presented as common sense, he just gives you ALL the information you need to come to the same conclusions.It s hard not to think that this book is just an advertising scheme for Bogle s company, Vanguard I have a hard time thinking anyone can finish this book and not decide to put all of their investment money in Vanguard The fact that the guy is in his 80 s, retired, already rich, and really doesn t need a book to prove the fact that his fund is the best means it probably was sincerely written and the guy is just one top notch dude who really wants everyone else to get rich and as I mention at the beginning he spends three of the last four chapters talking about just how awesome, selfless and brilliant he is Nothing wrong with that I suppose, when its true.They main take away If you don t actually want to read a long fact filled book on investing, but still be a really smart investor, just call Vanguard So really, keep reading bodice rippers and graphic novels and just move all your investments over to Vanguard Not a beginners guide to investing You have to be really geeky to read cover to cover There are other short comparatively books on investing that follow Bogle s investing theology A part geek can pick and choose what to read and come out with a lot of great advice Even if you know the basics invest for the long haul in super low cost funds indexed to major market indexes, there are certainly somehere that is practical I found his arguments concerning owning foreign stock interest Not a beginners guide to investing You have to be really geeky to read cover to cover There are other short comparatively books on investing that follow Bogle s investing theology A part geek can pick and choose what to read and come out with a lot of great advice Even if you know the basics invest for the long haul in super low cost funds indexed to major market indexes, there are certainly somehere that is practical I found his arguments concerning owning foreign stock interesting A few tidbits you can feel comfortable not owning foreign for a number of reasons including currency risk Also he made an interesting argument that much of the business done by companies in the SP 500 for example is foreign Anyways, glad I read it, but certainly not light reading This is not the book to read if you re looking for a primer on investing or retirement planning that includes Bogle s philosphy Instead, this is the book to read once you re underway and have some knowledge of what you re doing from his otherentry level books or after you ve started with the Boglehead s series.He goes into depth in an easy to read style about the mutual fund industry and why his philosophy on investing hold, index funds, don t time the market, passive investing, etc i This is not the book to read if you re looking for a primer on investing or retirement planning that includes Bogle s philosphy Instead, this is the book to read once you re underway and have some knowledge of what you re doing from his otherentry level books or after you ve started with the Boglehead s series.He goes into depth in an easy to read style about the mutual fund industry and why his philosophy on investing hold, index funds, don t time the market, passive investing, etc is both sound and proven given these facts.A excellent read, probably none better, should you wantdepth on the why and the numbers to back it up Just don t expect much advise or hand holding on the how.This may not need to be added as a reference book to have in your library as you navigate your own investments from time to time, but can make a good and enlightening one time read if only to shore up support for Bogle s investing philosphy borrowed from the library.Last, the 10th Ed adds his updated reflections at the end of each section looking back 10 years from when the book first came in print This review has been hidden because it contains spoilers To view it, click here This lengthy book was simple to understand but also profound and complex in its message Each section focuses on a different but crucial financial obstacle in the current mutual fund industry.It is a little difficult to go through this book due to its length, but its well worth it to read through the content The main message shines through, costs matter, buy for the long term. A very thorough blueprint for the individual investor Bogle believes in investor discipline, long term focus, diligent saving, and the use of passively managed index funds By clearly laying out the four dimensions of investing risk, reward, time, cost , Bogle makes a strong case for avoiding high cost, actively managed mutual funds or funds which have high turnover or high speculation This strategy will only lose the investor money by raising costs as the actively managed fund tries often i A very thorough blueprint for the individual investor Bogle believes in investor discipline, long term focus, diligent saving, and the use of passively managed index funds By clearly laying out the four dimensions of investing risk, reward, time, cost , Bogle makes a strong case for avoiding high cost, actively managed mutual funds or funds which have high turnover or high speculation This strategy will only lose the investor money by raising costs as the actively managed fund tries often in vain to outperform the market Bogle cites the research which says that actively managed funds very rarely can outpace the average index of the stock market due to the fees which eat into returns As he stresses COSTS ARE FOREVER Certainly not a light or easy read Its very dense with financial lingo and visuals I would not recommend for somebody just trying to get started with investing and who is not yet familiar with a lot of the financial terms I found it hard to keep up with at times and expected the book to cover the basics a little better It s also quite lengthy, especially the revised version which adds a lot of updated content to the already long original version not necessarily a bad thing Bogle s shorter book, The Little Book of Common Sense Investing, would beappropriate for somebody looking for a less bulky read I kind of wish I had chosen the shorter,accessible version, but still eye opening nonetheless Bogle s philosophy has created a loyal following of individual investors and led to huge growth for Vanguard and has helped enlighten those investors to the fact that they don t need to rely on fund managers whose interests may not align with their own For Bogle converts, you won t find much new in this book For everyone else, and that s most of you, you really ought to read this book An unflinching attack on America s financial industry, Bogle explains how the average investor is separated from their money But rather than doom and gloom, the book offers a way out index funds that keep your costs reasonable and offer reasonable returns. `Epub ☞ Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor ⇚ NATIONAL BESTSELLER Cogent, honest, and hard hitting a must read for every investor Warren E Buffett Praise for Common Sense on Mutual Funds Invoking both Thomas Paine and Benjamin Graham, Jack Bogle outlines a supremely logical plan not only to better investors returns, but to improve the whole fund industry This isn t just the best book yet by Bogle, it may well be the best book ever on mutual funds DON PHILLIPS, President CEO, Morningstar, Inc Buffett cannot teach you or me how to become a Warren Buffett Bogle s reasoned precepts can enable a few million of us savers to become in twenty years the envy of our suburban neighbors while at the same time we have slept well in these eventful times PAUL A SAMUELSON, Massachusetts Institute of Technology Department of Economics After a lifetime of picking stocks, I have to admit that Bogle s arguments in favor of the index fund have me thinking of joining him rather than trying to beat him Bogle s wisdom and his commonsense way of explaining things make this book indispensable reading for anyone trying to figure out how to invest in this crazy stock market JAMES J CRAMER, Money Manager and Senior Columnist for TheStreet Written in his characteristic forthright and visionary style, Bogle penetrates the myths and jargon to shed a powerful light on the central issues that confront every investor, no matter what their level of experience or sophistication MARTIN L LEIBOWITZ, Vice Chairman and Chief Investment Officer, TIAA CREF Jack Bogle is one of the great pioneer visionaries of the investment business In this book, he shares his knowledge, experience, and judgment to enable us to become better investors The final philosophical chapters provide insights that may help some of us become better people BYRON R WIEN, Chief US Investment Strategist Morgan Stanley Dean Witter