Perfect for: Foundation to Investing
Length: 304 pages
Depth: A lot of numbers thrown around but the main ideas of the book are easy to grasp
The Basics:
This book details John C. Bogle’s (founder of Vanguard) investing principles. The main idea of the book is that buying and holding low-cost-entire-stock-market index funds is the ideal way to invest. It requires minimal time and investing knowledge. Even with its simplicity, this strategy has been proven to achieve better returns than most other investment strategies.
All the Feels:
I started to second guess my investment portfolio. My current strategy is pretty much on par with what Bogle suggests: buy and hold low-cost index funds. However, I do so using ETF’s and probably have too much sector specific investments (ex: VWO – Vanguard Emerging Markets Stock Index). Regardless, I do not plan to turnover my entire portfolio just from reading this book.
My Main Takeaway(s):
Financial institutions have a large interest in creating new funds and investment vehicles as they live off fees and commissions.
The simplest investment strategy can produce returns that rival or beat many complicated strategies. Do not try to beat the market, instead try to match it. The market return is extremely powerful when compounded over a long-time horizon.
Buying and holding a low-cost index fund that represents the entire US stock market will offer the following benefits:
- Minimize taxes via minimal portfolio turnover
- Minimize fees, loadings and commissions
- Don’t have to pick the “right” fund – buy the entire market, not a single stock or segment. Avoid the hype that the financial industry pumps into fancy funds and investment vehicles. IGNORE FUND PAST PERFORMANCE.
- Requires little time or knowledge, but offers strong returns