Book review - The little book of common sense investing - John C Bogle
TLDR: Invest in S&P 500 vanguard index as soon as possible and keep doing it till retirement and after.
John C. Bogle is an American investor who could be considered as the father of index funds and the founder of Vanguard. His investment philosophy influenced the founding of his company which is almost synonymous with low cost index funds.
He explains his investment philosophy via a series of key metrics. I will try and cover a few important ones here.
Actively managed funds will find it difficult to beat S&P 500 index over the long term
Fund expenses compound over time and rob you of real returns
Actively traded funds incur additional costs because of Fund management and trading costs
Fund performance revert to the mean performance
For young investors starting their career, S&P 500 is the way to go
Older investors can consider moving to a 60:40 equity to bond split on index funds
Retirees can consider moving to a 50:50 equity to bond split on index funds
Do not chase fads of leveraged ETF, Smart Beta funds or mixing different geographies outside of the US
“The little book of common sense investing” - Review score: 3/5
This book can be summarised in a few lines, but Bogle takes the pain to support this thesis with additional data and comments from other well known investors to reinforce the point. But since it is an easy read, I wouldn’t mind recommending this book to anyone new to the investing space.
Edit 18-Jan-19 : John C. Bogle died on 17-Jan-19 at the age of 89, the day after this blog post was published. A true legend in the investing world. I was going to write a review about Warren Buffet and his investing philosophy, but i am not sure anymore.
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