The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books, Big Profits) Hardcover – Illustrated, October 16, 2017

In summary, invest in an index fund like S&P 500 along with bonds. The ratio depends on age. It is a sound and proven strategy for the long term. There are ways to improve on this strategy if you have the appropriate market understanding and tolerance for increased risk.

Good, concise information that everyone can use

As expected, Bogle believes in the efficient market theory, meaning you cannot consistently and over the long haul beat the market. But even if you believe you can beat the market, or that you have developed a system that when backtested against market data, you can show that you beat the market, you still lose in the real world, where there are transaction fees, and worst of all, taxes. It might seem obvious, but taxes eat up a hefty portion of your gains, and most of the "systems" that beat the market statistically require you to be able to trade as soon as their indicator tells you. In the real world, this doesn't happen. You might decide to try to hold on for long term capital gains only to see your winnings evaporate. Or, if you take the trade, you must deduct immediately the taxes due. And now you must get lucky again on the next stock you put the money into, but with 45% less (Fed + CA state). Maybe noone has calculated how much your next stock has to gain just to make up the tax loss. And that is what Bogle points out is the folly of following systems that try to beat the market (assuming someone has one that works consistently).In the real world, investors consistently time the market incorrectly. Bogle shows mathematically that you are not guaranteed to even get the return that the fund shows as an average, if you're always buying at the top. Indeed many mutual funds expand and shrink as their relative performance goes up or down. Therefore the majority of the investors in that fund got in near the peaks, and tend to exit when the fund goes down. People are constantly switching to the Morningstar 4 or 5 star funds, not realizing that they are not getting the average gains that attracted them because they put their money in after the gains have already occurred.Finally, as he has preached over and over again, expenses are like this little cancer that truly can devastate any actively managed fund. Expenses can eat up what dividends are paid, and reduce the amount of your capital to be put to work in compounding (assuming you reinvest).EFT's can work for you if you buy and hold. However their very format of being traded in the secondary market encourage frequent trading. Bogle is not a fan of market timing, and this includes sector investing, which is a form of market timing. The pletora of index EFT's of all different colors and stripes allow people to easily invest in sectors that are hot and dump them when they are not. Problem again, taxes, transaction costs, and bad timing.I suppose the old adage, "simple is best", rings true here. Bogle does admit that being humans, we would get bored if investing were only so simple. So he suggests that you split your money into Serious Money Account (95%) and Funny Money Account (5%). Then after one year, five years, ten years, compare your results. Don't forget the taxes, make sure to set them aside immediately from your profits (move them to another account, so you can't cheat!). Bogle is betting that if you put your Serious Money Account in indexs you will beat your Funny Money Account. I'm thinking you'll also sleep better and have time to pursue other hobbies, as well as have it easier during tax time. Do I follow his advice myself? Well I haven't for more than 20 years, and honestly I'm not beating the market, as the -$3000 which shows up most years tells. Problem is knowing what to do, and giving up on the dream of being above average. You do know that everyone can't possibly be above average, right? Sleep tight and get rich, what are you waiting for?

Bogle was the king of index investing having founded vanguard. Hence, of course, for him common sense investing means buying vanguard index funds and forget about you bought them, leave them there forever and their gains will compound over time. That has been a good advice for decades, at least since the ceation of vanguard and then explosion of index funds from other companies, and will continue to be a good advice. It's a low risk and average return way of passiving investment. However, that is especially true if you dont have fun or dont have the time to manage your investments. With index funds is very likely that you are lowering your arms, giving up and simply getting average returns that are not life changing except when old and if you started to invest very young. It's a strategy but is not necessarily the best of common sense. There are investing ways that make more common sense depending on the type of investor.

Jack Bogle, the inventor of the index fund, revolutionized how Americans invest and drove down the outrageously over-priced mutual funds that were charging so much for underperforming an unmanaged index. We all owe him a debt of gratitude for his pioneering work.I have read just about everything Bogle has written and wished I had ONLY read what Bogle has written. As a long-time trader and investor, I keep coming back to KISS: Keep It Simple, Stupid. 99% of us would earn more and sleep better if we stopped trying to trade the markets and instead bought a diversified basket of low cost index funds or ETFs and NEVER SELL.Yes, Bogle has a tendency to repeat himself, but he is pounding into our collective heads some simple truths that are hard to hear over all the nonsense and noise of the financial press and for-profit financial advisory "services":On average, we cannot expect to earn more than market averages; one outstanding fund manager's performance must come at the expense of a below average one;Basic (brutal) arithmetic teaches that our returns on average will equal market (index) returns minus expenses, fees, marketing, commissions, trading costs, and taxes; compounded over time, even a 2% per year cost will grow to hundreds of thousands of dollars less in savings for the average investor; choosing low cost vanilla index funds and avoiding the temptation to trade them will eliminate virtually all of these expenses, putting you in an immediate competitive advantage over managed, high cost funds;Only in the stock (and bond) market are you likely to be above average - far above average over time - if you simply buy the average instead of trying to outguess it;Don't search for the needle in the haystack - buy the whole haystack!The longer one's holding period, the less likely you are to outperform a passive average; for our investing lifetimes of several decades, the probability of outperforming a naive indexing strategy approaches that of winning the lottery.The most difficult thing about Bogle's message is that it is at some level so obvious and at another level so hard to follow. I have spent my life - with various degrees of success - searching for the holy grail of market inefficiency, trading stocks, options, ETFs, sector funds - any instrument I could find - all in the name of out-sized, extraordinary returns. It is very difficult to admit that much of this activity was probably a "don't try this at home" massive waste of time, so I understand that Bogle's message is a very difficult one for many of us to internalize and - most importantly - put to work in our portfolios. Most of us who are drawn to the markets have succeeded in other fields. We consider ourselves smart and cannot accept that the markets do not work like any other field, if for no other reason the markets are nothing more than the net behavior of millions of other participants, all who consider themselves equally bright, all trying to hedge and second-guess each other's behavior. As in religion, we can't all be right, but we can all be wrong.Indexing is the perfect hedge against our own ignorance and compulsion to wade into the arena and spend years or decades looking for that alchemy of finance that never completely works itself out. Even successful trading systems I have developed have required a tremendous amount of work,tinkering, monitoring, and sweat.Bogle's way is not only easier but more likely over the very long run to be successful. Every American high school student should have to read this book and be tested on its contents. The mutual fund industry would shrink (as it should) but markets would be far more efficient.If you loved this book, may I also suggest Jeremy Siegel's Stocks for the Long Run, which gives the same message using hundreds of years of stock market data, or Fooled by Randomness by Taleb (both cited by Bogle).

An investing classic!

For 99% of investors the Bogle approach is all you need. Stop overcomplicating the process. Stop investing emotionally. Stop watching the statistical noise of the daily market shift. Stick to what works; low cost index funds held for the long run.

It mostly tells you why low-cost index funds are better than any other mutual funds or ETFs, which is very good to know. It contains some other good investment insights as well.