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The Little Book of Common Sense Investing Book Summary

Book Summary

By John C. Bogle

15 min


John Bogle is the right mentor to teach you about investing. He is the founder of Vanguard Group and creator of the world’s first index mutual fund. His value investing strategies have helped many people become wealthy. Common sense tells us the best investment strategy is to buy and hold all of the nation’s publicly held businesses at a low cost. Trying to beat the stock market is a loser’s game especially because of the fees involved. Owning a diversified portfolio of stocks for the long term is the way to go.

About the Author

An American investor, business magnate, and philanthropist, John Clifton "Jack" Bogle was the founder and C.E.O. of The Vanguard Group and developed the first index fund. His ideal investment vehicle is a low-cost index fund that is held over the long term with the reinvestment of dividends and dollar-cost averaging. His 1999 book, Common Sense on Mutual Funds: New Imperatives for the Individual Investor, is a bestseller. 

He was born in 1929 in Montclair, New Jersey. He lived through the Great Depression. His parents lost their home, and his father became an alcoholic, resulting in his parents divorcing. He graduated magna cum laude from Princeton University in 1951, where he studied economics and investment. 

Walter L Morgan hired him after reading Bogle's thesis paper. 

He worked for the Wellington Fund and became an assistant manager in 1955. He pushed for Wellington to move from concentrating on a single fund to a new fund that he created. In 1970, he replaced Walter Morgan as chairman of Wellington. He was fired after approving a merger that did not go well. 

In 1974, he founded the Vanguard Company, one of the most successful companies in the investment world. In 1999, Fortune magazine described him as one of the four investment giants of the 20th century. In 1976, he founded First Index Investment Fund, which eventually became the Vanguard 500 Index Fund, the first index mutual fund available to the public. 

Suffering from heart issues, he resigned as C.E.O. His second in command, John J Brennan, became C.E.O. Bogle had a heart transplant in 1996. He later returned to Vanguard and assumed the title of senior chairman, which led to a fight with Brennan. 

Bogle created the world's first index mutual fund in 1975. He insists that index funds are a better investment vehicle than actively managed mutual funds. He defends that an actively managed fund can't beat the performance of a low-cost index fund over the long run, especially given the fees that come with the actively managed fund. He believes in the following common-sense approach to investing:

Choose low-cost funds.

Advice costs money. 

Past performance doesn't predict future results. 

Use past performance to determine consistency and risk.

Beware of rock star mutual fund managers. 

Beware of asset size

Don't invest in too many funds

Buy and hold your fund portfolio.

Married to Eve Sheered with six children, Bogle lives in Bryan Mawr, Pennsylvania. He received honorary doctorates from Princeton University in 2005 and Villanova University in 2011. 
book summary - The Little Book of Common Sense Investing by John C. Bogle

The Little Book of Common Sense Investing

Book Summary

15 min
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