Investing is all about common sense. Owning a diversified portfolio of stocks and holding it for the long term is a winner’s game. Trying to beat the stock market is theoretically a zero-sum game (for every winner, there must be a loser), but after the substantial costs of investing are deducted, it becomes a loser’s game.
Common sense tells us—and history confirms—that the simplest and most efficient investment strategy is to buy and hold all of the nation’s publicly held businesses at very low cost. The classic index fund that owns this market portfolio is the only investment that guarantees you with your fair share of stock market returns.
To learn how to make index investing work for you, there’s no better mentor than legendary mutual fund industry veteran John C। Bogle. Over the course of his long career, Bogle—founder of the Vanguard Group and creator of the world’s first index mutual fund—has relied primarily on index investing to help Vanguard’s clients build substantial wealth. Now, with The Little Book of Common Sense Investing, he wants to help you do the same.
Some excerpts from the book:
Index funds eliminate the risks of individual stocks, market sectors, and manager selection.
Only stock market risk remains.
Don’t allow a winners game to become a loser’s game.
Fund investors are confident they can easily select superior fund managers. They are wrong.
The stock market is a giant distraction.
If the data do not prove that indexing wins, well, the data are wrong.
It’s amazing how difficult it is for a man to understand something if he’s paid a small fortune not to understand it.
The miracle of compounding returns is overwhelmed by the tyranny of compounding costs.
Interesting!! What do you think? Waiting to hear your comments.