The Little Book of Common Sense Investing

Vanguard founder John Bogle presents the simplest and most effective wealth-building strategy: buy and hold, at very low cost, a mutual fund tracking a broad stock market index like the S&P 500, guaranteeing your fair share of stock market returns. The book demonstrates that low-cost index funds (around 1% annual costs) consistently outperform the vast majority of actively managed mutual funds (3-3.5% annual costs) since 1970, with 1980-2005 data showing S&P 500 index funds returning 12.3% versus average mutual fund returns of 10%. Bogle argues that trying to beat the market "is a loser's game" because "the more the managers and brokers take, the less investors make."

8 sections ยท 31 lessons

Course outline

Core Principles

  1. Market Math
  2. Cost Impact
  3. Buy Haystack
  4. Index Funds
  5. Compounding
  6. Cost Compounding
  7. Core Principles

Cost Management

  1. Costs Certain
  2. Lower Wins
  3. Trading Costs
  4. Tax Efficiency
  5. Fund Selection
  6. Bond Costs
  7. Cost Management

Market Behavior

  1. Winner's Game
  2. Losing Game
  3. Mean Reversion
  4. Chase Fails
  5. Earned Returns
  6. Market Behavior

Index Fund Advantages

  1. Index Certainty
  2. Index Evidence
  3. Total Market
  4. ETFs vs Funds
  5. Index Fund Advantages

Portfolio Construction

  1. Allocation
  2. Age Allocation
  3. Rebalancing
  4. Portfolio Construction

Retirement Planning

  1. Account Location
  2. Withdrawal Strategy
  3. Retirement Planning

Behavioral Discipline

  1. Volatility
  2. Stay Invested
  3. Investment Advice
  4. Behavioral Discipline

Implementation

  1. Money Types
  2. Getting Started
  3. Implementation

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