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Common Sense on Mutual Funds, by John C. Bogle You can buy this book from the Fool's Bookshop. This is a difficult book to put down once you start: but be warned, you may not like what John Bogle has to say. John Bogle's revelations into the intricacies of the workings of the mutual fund industry can be controversial. In writing this book, he had two objectives in mind. The first was to help his readers become better investors. The second was to identify the shortcomings of the mutual fund industry. On both counts, his book has achieved its stated aims majestically. This book will not sit comfortably on the shelf of the active day trader, nor will it be a favourite of those who believe they have discovered a market-beating strategy. However, both these groups of investors may enjoy looking for weaknesses in John Bogle's arguments... something I was unable to find. The premise that a long-term market-beating strategy exists is debunked right from the very start. The "Pie Theory" takes the reader through some simple arithmetic that demonstrates the odds against outperforming the market. John Bogle is a great proponent of long-term investing and is quick to highlight the deficiencies of a short-term approach to long-term investing. He neither believes in market timing nor the rapid turnover of long-term investment portfolios. He is scathing of investors, both professional and individual, who are aware of history but unwilling to heed it. The chapter on Occam's Razor is compelling reading and explains the nature of long-term returns produced by stocks and bonds. John Bogle is also a great fan of simplicity in investing and highlights the benefits of the market index-tracking fund. He also outlines some simple rules when selecting managed funds. He picks seven things to look for when buying a mutual fund, backed up with well-chosen examples. Conclusion This is a great book and one I wish had been written some dozen years earlier when I first embarked on the road of active investing. John Bogle's book is a "must-read" for beginner investors and a "should read" for seasoned stock-jocks. To get your copy from Amazon.co.uk, click here. Ratings (out of 5) Where Next? Discuss this and other finance books on our dedicated discussion board.
Content: 4
Readability: 3
Foolishness: 4