The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits)
by John C. Bogle
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Book Summary Information
Author: John C. BogleEdition: Hardcover
Audio: English (Original Language); English (Unknown); English (Published)
Published: 2007-03-05
ISBN: 0470102101
Number of pages: 216
Publisher: Wiley
Book Reviews of The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits)
Book Review: BUYER BEWARE: Index Investors have lost money over 10 years...
Summary: 1 Stars
How is that considered safe? The S & P 500 was over 1270 in June of 1999, and is currently near 920, 10 years later...down, 20+ %
The fact is markets do go down, and often times stay down. If one owned the Nasdaq index in the year 2000 at 5000, they are still down over 60% 9 years later.
The Japanese Nikkei index is still down OVER 80% 20 years later.
There is no guarantee that markets rise over time. If it were that easy, we would all be stock market millionaires, but statistically few are.
INDEX INVESTING DOES NOT ADDRESS THE SINGLE MOST IMPORTANT ASPECT OF MONEY MANAGEMENT - RISK MANAGEMENT.
Before you scoff at the facts, do some research, google or wiki, on Bruce Kovner, John Paulson, Michael Marcus, John Henry (Owner of the Boston Red Sox), Monroe Trout, William Dunn, George Soros - all of them "market timers", and "stock pickers" - and all with net worths in the hundreds of millions and billions - literally.
It is a nice sales pitch to tell people that market timing doesn't work, just keep putting money blindly into the financial markets with no risk management strategy.
The financial markets are serious business, and the fact is that the uninformed majority's losses pave the golden road for the few who truly understand that markets do not always "go up".
The fallacy of "buy and hold" index investing has been exposed as ridiculous as the day trading tow truck driver commercials of the late 90's. What exactky is the plan of the index investing crowd for declining markets??
If one owned the Nasdaq index in the year 2000 at 5000, they are still down over 60% 9 years later.
The Japanese Nikkei index is still down OVER 80% 20 years later. Fact...so does index investing really work, or is it just a clever way to "sell" index funds.
Index investing is the King of all financial "sales-pitches" that mislead the uninformed majority...Index investing only works in bull markets, period...A superior investment strategy provides absolute returns, in all market conditions.
Index investing does not tell investors what to do when markets decline..."OK, sit tight, or buy more!" Are you serious. "Just hold on the markets always come back"...do they?
10 years later the S & P is down over 20%
The author has an angle to pitch, which has built Vanguard into a mutual fund giant, which is great for Vanguard, but how have their customers actually done?
Index investing is a great "sales-pitch" - don't let high priced brokers, etc. take your money, when the index fund company can take your money instead.
With the S & P index fund down over 1, 3, 5, and 10 year periods have the fund companies refunded the fees they charged investors to manage the funds? Absolutely not.
As a champion of the investor, why should the author's company make money if their investors are losing money.
It is comforting for the unsuspecting investing public to believe that index investing is a "better, nobler" way, but the numbers do not lie.
Market timing absolutley works, active management absolutley works, but then folks would have to admit that it isn't as easy as this author would make you think it is to make money investing.
This author would have people believe that markets are efficient and that buying assets on the way down is a wise investment choice...How is any investment with negative returns for the rolling 1, 3, 5, 10 year period a good investment? It isn't
Index investing is a bill of goods sold to the unsuspecting public...
If "stock-picking" and "market-timing" don't work explain that to hedge fund managers who shorted the indexes to gains last year, and are profitable again this year in a rising market...
To truly participate profitably in the markets one needs to understand how to profit in rising and decling markets...
Let's not confuse brains with a bull market..Let's see the stats for index investing over the last 10 years, not very inclined to sell alot of index funds...
Bottom line, if market timing doesn't work, ask where index investors would be if they sold 2 years ago, and more importantly didn't buy all the way down...
Not a very popular stance, but the facts are the facts - the author is right about one things - financial firms all have a sales pitch to get your money, including the author's company - they are all cut from the same cloth, some arrive in different packaging though.
BUYER BEWARE...
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Summary of The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits)
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.
Filled with in-depth insights and practical advice, The Little Book of Common Sense Investing will show you how to incorporate this proven investment strategy into your portfolio. It will also change the very way you think about investing. Successful investing is not easy. (It requires discipline and patience.) But it is simple. For it's all about common sense.
With The Little Book of Common Sense Investing as your guide, you'll discover how to make investing a winner's game:
- Why business reality-dividend yields and earnings growth-is more important than market expectations
- How to overcome the powerful impact of investment costs, taxes, and inflation
- How the magic of compounding returns is overwhelmed by the tyranny of compounding costs
- What expert investors and brilliant academics-from Warren Buffett and Benjamin Graham to Paul Samuelson and Burton Malkiel-have to say about index investing
- And much more
You'll also find warnings about investment fads and fashions, including the recent stampede into exchange traded funds and the rise of indexing gimmickry. The real formula for investment success is to own the entire market, while significantly minimizing the costs of financial intermediation. That's what index investing is all about. And that's what this book is all about.
JOHN C. BOGLE is founder of the Vanguard Group, Inc., and President of its Bogle Financial Markets Research Center. He created Vanguard in 1974 and served as chairman and chief executive officer until 1996 and senior chairman until 2000. In 1999, Fortune magazine named Mr. Bogle as one of the four "Investment Giants" of the twentieth century; in 2004, Time named him one of the world's 100 most powerful and influential people, and Institutional Investor presented him with its Lifetime Achievement Award.
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