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- Description
- Product Details
- About the Author
- Read an Excerpt
- What People are Saying
- Table of Contents
Description
John C. Bogle shares his extensive insights on investing in mutual funds
Since the first edition of Common Sense on Mutual Funds was published in 1999, much has changed, and no one is more aware of this than mutual fund pioneer John Bogle. Now, in this completely updated Second Edition, Bogle returns to take another critical look at the mutual fund industry and help investors navigate their way through the staggering array of investment alternatives that are available to them.
Written in a straightforward and accessible style, this reliable resource examines the fundamentals of mutual fund investing in today's turbulent market environment and offers timeless advice in building an investment portfolio. Along the way, Bogle shows you how simplicity and common sense invariably trump costly complexity, and how a low cost, broadly diversified portfolio is virtually assured of outperforming the vast majority of Wall Street professionals over the long-term.
- Written by respected mutual fund industry legend John C. Bogle
- Discusses the timeless fundamentals of investing that apply in any type of market
- Reflects on the structural and regulatory changes in the mutual fund industry
- Other titles by Bogle: The Little Book of Common Sense Investing and Enough.
Securing your financial future has never seemed more difficult, but you'll be a better investor for having read the Second Edition of Common Sense on Mutual Funds.
Product Details
ISBN-13: 9780470138137
Media Type: Hardcover
Publisher: Wiley
Publication Date: 12-02-2009
Pages: 656
Product Dimensions: 6.30(w) x 9.10(h) x 1.50(d)
About the Author
John C. Bogle is founder of the Vanguard Mutual Fund Group 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. Bogle is also the author of Enough. and The Little Book of Common Sense Investing, both published by Wiley.
Read an Excerpt
Chapter One ON LONG-TERM INVESTING Chance and the Garden Investing is an act of faith. We entrust our capital to corporate stewards in the faith—at least with the hope—that their efforts will generate high rates of return on our investments. When we purchase corporate America's stocks and bonds, we are professing our faith that the long-term success of the U.S. economy and the nation's financial markets will continue in the future. When we invest in a mutual fund, we are expressing our faith that the professional managers of the fund will be vigilant stewards of the assets we entrust to them. We are also recognizing the value of diversification by spreading our investments over a large number of stocks and bonds. A diversified portfolio minimizes the risk inherent in owning any individual security by shifting that risk to the level of the stock and bond markets. Americans' faith in investing has waxed and waned, kindled by bull markets and chilled by bear markets, but it has remained intact. It has survived the Great Depression, two world wars, the rise and fall of communism, and a barrage of unnerving changes: booms and bankruptcies, inflation and deflation, shocks in commodity prices, the revolution in information technology, and the globalization of financial markets. In recent years, our faith has been enhanced—perhaps excessively so—by the bull market in stocks that began in 1982 and has accelerated, without significant interruption, toward the century's end. As we approach the millennium,confidence in equities is at an all-time high. Chance, the Garden, and Long-Term Investing Might some unforeseeable economic shock trigger another depression so severe that it would destroy our faith in the promise of investing? Perhaps. Excessive confidence in smooth seas can blind us to the risk of storms. History is replete with episodes in which the enthusiasm of investors has driven equity prices to—and even beyond—the point at which they are swept into a whirlwind of speculation, leading to unexpected losses. There is little certainty in investing. As long-term investors, however, we cannot afford to let the apocalyptic possibilities frighten us away from the markets. For without risk there is no return. Another word for "risk" is "chance." And in today's high-flying, fast-changing, complex world, the story of Chance the gardener contains an inspirational message for long-term investors. The seasons of his garden find a parallel in the cycles of the economy and the financial markets, and we can emulate his faith that their patterns of the past will define their course in the future. Chance is a man who has grown to middle age living in a solitary room in a rich man's mansion, bereft of contact with other human beings. He has two all-consuming interests: watching television and tending the garden outside his room. When the mansion's owner dies, Chance wanders out on his first foray into the world. He is hit by the limousine of a powerful industrialist who is an adviser to the President. When he is rushed to the industrialist's estate for medical care, he identifies himself only as "Chance the gardener." In the confusion, his name quickly becomes "Chauncey Gardiner." When the President visits the industrialist, the recuperating Chance sits in on the meeting. The economy is slumping; America's blue-chip corporations are under stress; the stock market is crashing. Unexpectedly, Chance is asked for his advice: Read an Excerpt
Chance shrank. He felt the roots of his thoughts had been suddenly yanked out of their wet earth and thrust, tangled, into the unfriendly air. He stared at the carpet. Finally, he spoke: "In a garden," he said, "growth has its season. There are spring and summer, but there are also fall and winter. And then spring and summer again. As long as the roots are not severed, all is well and all will be well."<
What People are Saying
Buffett cannot teach you or me how to become a Warren Buffett. Bogle’s reasoned precepts can enable a few million of us savers to become in twenty years the envy of our suburban neighbors — while at the same time we have slept well in these eventful times. After a lifetime of picking stocks, I have to admit that Bogle’s arguments in favor of the index fund have me thinking of joining him rather than trying to beat him. Bogle’s wisdom and his commonsense way of explaining things make this book indispensable reading for anyone trying to figure out how to invest in this crazy stock market. Jack Bogle still believes candor with investors, integrity in investing, and low cost are important. Thank goodness. Thank you, Jack. You are so right! What People are Saying About This
Paul A. Samuelson
— (Paul A. Samuelson, Massachusetts Institute of Technology, Department of Economics)
— (James J. Cramer, Money manager and senior columnist for TheStreet.com)
— (Charles D. Ellis, author, Winning the Loser’s Game)
Cogent, honest and hard-hitting — a must read for every investor.
David GardnerJack Bogle has championed and served individual investors since before the popular concept of ‘individual investor’ existed.
— (David Gardner, Co-founder, The Motley Fool)
Written in his characteristic forthright and visionary style, Bogle penetrates the myths and jargon to shed a powerful light on the central issues that confront every investor, no matter what their level of experience or sophistication.
Jack Bogle is one of the great poineer/visionaries of the investment business. In this book he shares his knowledge, experience, and judgement to enable us to become better investors. The final philosophical chapters provide insights that may help some of us become better people.
— (Byron R. Wien, Chief U.S. Investment Strategist, Morgan Stanley Dean Witter)
Common Sense on Mutual Funds explains how you can improve your returns for maximum results over the long term. Bogle gives practical advice on taxes, costs, and other mutual fund matters. This is a must read for the mutual fund investor.
— (Michael Bloomberg, Founder and CEO of Bloomberg, LP)
Common Sense on Mutual Funds marks the culmination of one of Wall Street’s most inspired careers. Invoking both Thomas Paine and Benjamin Graham, Jack Bogle outlines a supremely logical plan not only to better investors’ returns, but to improve the whole fund industry. This isn’t just the best book yet by Bogle, it may well be the best book ever on mutual funds.
— (Don Phillips, President and CEO Moningstar, Inc.)
I date my success as an investor from the day I met Jack Bogle and learned about index mutual funds. If you want to do better in the market, and really understand what you’re doing, read this book.
— (Jane Bryant Quinn, Newsweek columnist and author, Making the Most of Your Money)
Superior in intellect, character, and performance, the investment genius who defied conventional wisdom and proved his critics wrong gives readers a wealth of practical advice.
— (Hon. William E. Simon, Former Secretary of the Treasury)
With his customary clarity and candor, Bogle delivers a sophisticated book that will make you a smarter, richer, and perhaps most welcome of all, far calmer investor. Memorize his eight rules for fund investing right away. They will make and save you money.
— (Tyler Mathisen, Financial journalist)
Table of Contents
Foreword for the Original Edition xiii Preface to the 10th Anniversary Edition xv Preface to the Original Edition xix Acknowledgments for the 10th Anniversary Edition xxvii Acknowledgments for the Original Edition xxix About the Author xxxi Part I: On Investment Strategy 1 Chapter 1 On Long-Term Investing 3 Chance and the Garden Chapter 2 On the Nature of Returns 45 Occam’s Razor Chapter 3 On Asset Allocation 77 The Riddle of Performance Attribution Chapter 4 On Simplicity 109 How to Come Down to Where You Ought to Be Part II: On Investment Choices 143 Chapter 5 On Indexing 145 The Triumph of Experience over Hope Chapter 6 On Equity Styles 191 Tick-Tack-Toe Chapter 7 On Bonds 217 Treadmill to Oblivion? Chapter 8 On Global Investing 251 Acres of Diamonds Chapter 9 On Selecting Superior Funds 277 The Search for the Holy Grail Part III: On Investment Performance 303 Chapter 10 On Reversion to the Mean 305 Sir Isaac Newton’s Revenge on Wall Street Chapter 11 On Investment Relativism 329 Happiness or Misery? Chapter 12 On Asset Size 347 Nothing Fails Like Success Chapter 13 On Taxes 373 The Message of the Parallax Chapter 14 On Time 401 The Fourth Dimension—Magic or Tyranny? Part IV: On Fund Management 423 Chapter 15 On Principles 425 Important Principles Must Be Inflexible Chapter 16 On Marketing 445 The Message Is the Medium Chapter 17 On Technology 465 To What Avail? Chapter 18 On Directors 483 Serving Two Masters Chapter 19 On Structure 503 The Strategic Imperative Part V: On Spirit 533 Chapter 20 On Entrepreneurship 535 The Joy of Creating Chapter 21 On Leadership 549 A Sense of Purpose Chapter 22 On Human Beings 567 Clients and Crew Afterword 585 Appendix I Some Thoughts about the Current Stock Market as 2010 Begins 591 Appendix II Some Thoughts about the Current Stock Market as 1999 Begins 599 Notes 607 Index 613Table of Contents
Foreword for the 10th Anniversary Edition ix
