To begin, we’ll discuss equity more generally-what it is, its role in the US stock market, and how to own it via equity index funds and actively managed mutual funds. Throughout this guide, we’ll dig deeper into the data that underlie Bogle’s arguments and examine how the book’s predictions have panned out since its publication. Finally, we’ll examine Bogle’s suggestions about incorporating bonds into your portfolio. Next, we’ll discuss areas where mutual funds cost investors more than index funds, followed by statistics showing the higher returns that index funds deliver. In this guide, we’ll first introduce the concept of equity investing and clarify the distinctions between index funds and actively managed mutual funds. Labeled one of the “four investment giants of the 20th century” by Fortune magazine, Bogle brings his years of experience evaluating investment strategies into this book, which conveys the views that he put into practice for over 50 years. There are various companies vying to manage investors’ money while platforms like Robinhood that encourage expedient day trading entice investors with the possibility of quick profits and beating the market.Īmidst this chaos, The Little Book of Common Sense Investing by Jack Bogle argues that the winning strategy for novice investors is simple: Invest in traditional index funds and hold them indefinitely.Īs the founder of the Vanguard Group, one of the world’s largest investment firms, Bogle himself created the world’s first index fund in 1975, which tracked the S&P 500-a stock market index containing stocks of the 500 largest companies in the US. The Little Book of Common Sense Investing

Because the costs of mutual funds vastly outstrip those of index funds, Bogle argues that mutual funds deliver reduced returns, and those relative losses compound over time.īelow is a brief overview of The Little Book of Common Sense Investing by John Bogle. In The Little Book of Common Sense Investing, Jack Bogle outlines the reasons why investors typically make more money with index funds than actively managed mutual funds. What is Jack Bogle’s The Little Book of Common Sense Investing about? What’s the key message to take away from the book? Like this article? Sign up for a free trial here. Shortform has the world's best summaries and analyses of books you should be reading. This article is an excerpt from the Shortform book guide to 'The Little Book of Common Sense Investing' by John C.

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