John C. Bogle (1929–2019)

I read this book in 8th grade, and I honestly didn't learn anything from this book since I've been a nerd about this stuff years before. It's a great book for those new to investing and have no idea what to invest in.

Book summed up in 1 sentence: Invest in indexes with low expense ratios, low turnover costs and sales charges (e.g. VOO, VTI).

Here are some other takeaways so you don't have to read this book:
-Inflation and expense ratios can diminish the after-cost return, which factors in expense ratio, sales charge, and turnover costs. These costs are too large to be ignored. For instance, a 9.5% return could very quickly result in a real return of 4.5% after 2% expenses and 3% inflation. Another thing to consider is that as costs increase, so does volatility and risk—where volatility is a measure of risk. This measurement can be used to calculate the risk-adjusted return.
-Low-cost index funds negate these effects with expense ratios as low as 0.04% and leave you with the fair share of low-cost equity returns: they outperform high-cost index funds and actively managed mutual funds after all factors considered. Note that the reason mutual funds carry higher expense ratios is since they require more hands-on management.
-“In the short run the stock market is a voting machine…in the long run it is a weighing machine.”-Benjamin Graham
-Don't look for the needle; buy the haystack… (más)

I came to this after reading Tim Hale's "Smarter Investing”, where John Bogle's name was mentioned several times. The goal of this book is to convince the reader that "the classic index fund is the only investment that guarantees the achievement" of investment success and the author sets about his task with zeal. It’s a short volume that gives a good, straightforward overview of the arguments as to why index funds make sense for most (all ?) investors who are looking to invest in equities (and bonds as well). The writing style is clear and logical (if sometimes repetitious) with plenty of data to support the argument. Each chapter ends with a selection of quotes from market practitioners and academics and is a good source of bibliographic material.

I would have liked more discussion of asset allocation than just the few pages in the last chapter (although to be fair it is a short book) and I thought that the author was overly dismissive of Exchange Traded Funds (ETFs). He's also not shy in name-dropping his own company Vanguard and their range of index funds. (Vanguard are an extremely impressive company however !)

Overall, this book is interesting reading and achieved its aim of convincing this reader. Worth buying.… (más)