Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition 2nd Edition
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"Common Sense on Mutual Funds," by John Bogle, inventor of the retail index fund and founder of the Vanguard Group. It’s the best book ever on fund investing, just updated for new investors. The case for indexing is rock solid, as you’ll see here. It’s the only strategy that works, long term."
—Jane’s Book Club, http://janebryantquinn.com
"Never before [have] I seen a book that so openly and successfully juxtaposed that which was said against that which actually happened over the period of a decade. . . As a long-time believer in low cost indexing, I didn’t think I’d learn much from this book. I was wrong! Reading this book offers investors a glimpse of the perspective and lessons learned from recent years that were anything but normal. . . This book, of course, is even more valuable to those that aren’t a believer in indexing. It may be a hard read if you’re among those who still believe that 90 percent of investors can all be above average. Consider the effort well worth it because the common sense in this book may save your retirement. Reading this book might also help you realize, as I have, that common sense really is pretty uncommon."
—Allan Roth, CBS Moneywatch.com
"The definitive book on index fund investing. It explains why index fund investing is the best way — no, the only way — for people to invest their savings. . . [Bogle] does something few in the investing world would dare to do. He stands by what he said 10 years ago. The original text is presented unchanged. New data is added to reveal what happened over the past 10 years."
—Scott Burns, The Austin American Statesman
A worthwhile addition to one’s library, particularly as a reference publication. . . This . . revision of a book written ten years ago . . . with the original text still present in the book, and an analysis of the predictions that were made ten years ago. . . makes fascinating reading. The analysis of the predictions on their own makes the book worth a read, even if all one does is look at the coloured sections which contain the updated material.”
(Australian Investors Association)
“More Common Sense from Jack Bogle. Jack’s back and he’s unbowed. . . The tome holds up well after a decade. Bogle hasn’t altered a word of the original text, just added color coded data and text boxes to show where he was on or off the mark. Guess what? Jack doesn’t offer many mea culpas. . . The book is still essential reading for investors. Whether you think indexing is the best way to investor not, it’s filled with simple, powerful advice that can help stack the odds of long-term financial success in your favor. Reading it then helped shape me as an investor and analyst. Here are the most important lessons (besides the obvious one: that indexing works) that I’ve drawn from the pages of both editions, as well as a couple of points where I, and many of my colleagues, dare to differ from St. Jack.” (Morningstar)
From the Inside Flap
"Cogent, honest, and hard-hitting—a must read-for every investor."
Warren E. Buffett
Praise for Common Sense On Mutual Funds fully updated 10th anniversary edition
"The only thing better than Bogle's original book is its improved revision. Bon appetit!"
—Paul A. Samuelson, Nobel Laureate, Economics
"Were I allowed to recommend only one investment volume to friends and family, the updated edition of Common Sense on Mutual Funds would be it—it is even better than the first edition was ten years ago."
—William J. Bernstein, author of The Investor's Manifesto, A Splendid Exchange, The Birth of Plenty, and The Four Pillars of Investing
"How do you improve upon perfection? Well, with this tenth anniversary edition of Common Sense on Mutual Funds, the best mutual fund primer just got better."
—Don Phillips, Managing Director, Morningstar
"In this timely update of Common Sense on Mutual Funds, John Bogle improves on what was the finest book on mutual funds ever written."
—Jane Bryant Quinn, financial columnist and author of Smart and Simple Financial Strategies for Busy People
"Jack Bogle cares passionately about everyday Americans—and that passion is palpable in these pages. This new edition of Common Sense on Mutual Funds will send you marching into the financial markets with a sense of mission."
—Jonathan Clements, author of The Little Book of Main Street Money
"When the history of modern investment management is written, John Bogle will stand out as one of its towering figures."
—Byron R. Wien, Vice Chairman, Blackstone Advisory Services
"A powerful no-nonsense prescription for how individual investors should structure their portfolios in the current market environment."
—Martin Leibowitz, Managing Director, Morgan Stanley
- Publisher : Wiley; 2nd edition (December 2, 2009)
- Language : English
- Hardcover : 656 pages
- ISBN-10 : 0470138130
- ISBN-13 : 978-0470138137
- Item Weight : 2.2 pounds
- Dimensions : 6.1 x 1.9 x 9.1 inches
- Best Sellers Rank: #137,389 in Books (See Top 100 in Books)
- Customer Reviews:
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Top reviews from the United States
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That said, I cannot give this book a 5 star rating because in my eyes, it spends far too long discussing a far too simple premise. The premise is straightforward and can be gleamed from the first few pages of reading.
"On average, investors would be better off to invest in an large cap index fund like the S&P 500 for the long term than any other investment strategy".
If you are convinced of this line of reasoning already, this book may not be worth reading cover to cover. Bogle does state near the beginning of the book, "My goal has been to make each chapter a freestanding and indepedent essay on a particular issue". In my opinion, this book is an essential "manual" for personal investment strategy, but does not suffice for a casual weekend read. The text ruminates on the topic of mutual funds to the point where the read feels like the logical arguments are going in circles. Bogle does argue his points well though and backs them up with large amounts of historical data while also injecting his personal wisdom every so often (the true gem of the book).
As a millenial who has taken the personal computer revolution for granted, it is tough to appreciate the weight of this book. U.S. mutual funds now hold over $2.5 T of U.S. equity securities compared to the $40 B in 1982, and even more startling, the concept of "indexing" is actually a novel idea still. It was hard for me to grasp the innovation of indexing because I have always found it to be an obvious idea. We have fast computers and lots of stock data, so why not index?
Although my demographic (23 years of age) was probably a primary target of this text, I feel that it did not accomplish the task of compelling my thinking enough to read it straight through. Definitely worth a purchase, but I plan to peruse the chapters in random order as I need them rather than sit down and read the book cover to cover.
It is like the reference Encyclopedia of Mutual Funds. The 600+ pages cover everything from basic definitions to strategies for investment to include several levels of the economics and math that go with it.
On of my favorite things about this booko is that Bogle does not pull any punches. This is not a get rich quick view of funds. It is a treatise and a lifetime of experience condensed down into a readable book.
While you can read the book cover to cover, I recommend using it as a reference where you read the book in the sections as you need them.
The book's first 3 chapters start off well, giving the reader a decent amount of information. However, a trend quickly appears in the author's writing style. John Bogle REALLY likes to repeat himself... ALL THE TIME. For the first quarter of this book it can be forgiven as a "writing-of-the-times" for when it was first released and he was arguing for a larger acceptance of index funds. However, even the 10-years-later musings start being repetitive after the first third. Honestly, a better 10-years-latter version would have been one that removed this excess repetition. I am convinced that the length of this book could be reduced by a full 20%.
Besides repetition (which I cannot understate how agonizing it becomes as you progress in the book) there is a consistent flaw in John Bogle's need to attribute meaning to every part of a figure, even when he stated once a few pages before that 5 year periods are rather meaningless on their own. This is not helped by figure edits that dramatically change their meanings afterward, leaving the reader guessing at what they mean. One that comes to mind is the change of certain figures from the Sharpe ratio to another that was nearly unrepresented in prior chapters. That the new figure-of-merit is better is undoubted, however the lack of explanation leaves the chapter significantly wanting.
To harp more on figures I revisit John Bogle's need to explain EVERY part of figure, even after he told the reader NOT to do this! Perhaps one of the worst chapters for this is chapter 10, where it becomes quickly obvious that, not only are the figures poorly explained, but what they imply has very little meaning. The only truly useful bit of information comes when John Bogle finally draws back to decade long+ trends (20+ years for one figure -.-). Only at this point is his argument of the market returning to a mean believable, leaving all the previous data delving and discussion next to completely useless.
Overall, the book is useful. However, it has definitely not aged well. The choice to release a new edition only as a 10 year reflection on past sections was not the revision that this book needed to stay truly relevant.
Top reviews from other countries
Way too long for what the author is advocating which I am going to give you a breakdown:
1) In the short term, stocks are more volatile than bonds but produce a greater return in the long term
2) A younger investor with a longer investing outlook should allocate more of their capital in common stocks and less in bonds but the reverse for an older investor with shorter time outlook.
3) The likelihood of active investing in producing consistent returns is poor for the long-term as few managers have consistently outperformed the market.
4) An index fund is the surest way to capture returns from the whole market
5) Go for an index fund that has the lowest cost and lowest turnover to maximise returns for the investor
6) Make sure the index represents the whole market and has a cap on how much funding it is open too.
7) Use these principles to invest in both bonds and index funds
8) Take home message the lowest cost fund with the lowest turnover produces the best result in the long term.
For the message, I give the book 5 Stars!