Book Review: “The Little Book of Common Sense Investing”

“The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns” Written by by John C. Bogle

Who it’s for: Any investor looking to optimize market returns over the long-term.

Readability: HIGH. A book about investing is not usually what I’d call “light reading” but this book really is an easy read. It contains a number of charts (the good kind, not the eyes-glaze-over kind), tables, summary statements and excerpts to keep the reader engaged. It’s a compact 216-page book that packs a punch.

What I liked about it: The book delivers on its promise. The cover suggests that we will learn how to get our fair share of stock market returns and it teaches just that. Bogle is very clear throughout about what it is we need to do and, more importantly, what we should not do, to be successful investors over the long-term. He provides a great deal of proof, including third-party validation many times over, to increase the odds that we’ll heed his advice.

What I didn’t like about it: I’m always suspicious of a book that, on the cover, appears self-serving. When I first picked up this book. I was ready to pick it apart for biased thinking, given it was a book about low-cost index investing written by the man behind Vanguard, the first and arguably best-known low-cost index fund company around.

As it turns out, I was unable to do so because of the overwhelming evidence Bogle provides in it. This evidence includes advice from leaders in the financial industry who gain little, or even lose, by agreeing with his recommendations. You can find these highlighted throughout the book in appropriately named “Don’t Take My Word for It” text boxes.

The only advice I could find that is questionable, ten years after it was first published, is the blanket suggestion that Target Date Funds are a good option. Some of these funds carry a hefty MER (management expense ratio) compared to index funds and, as a result, their suitability for some investors is questionable.

Where to find it:

Amazon @ $10.63