“The Only Way to Guarantee Your Fair Share of Stock Market returns”
By Vanguard Group Founder, John C Bogle
If there is only one book you read about investing, we suggest it’s this one. John Bogle explains why attempting to outperform the market is ultimately a loser’s game and how the simplest of investment strategies deliver the greatest return.
The key is to capture the returns the whole market has to offer by Indexing. “The Index Fund is simply a basket (portfolio) that holds many, many eggs (stocks) … and basically represents the entire stock market basket, not just a few scattered eggs.”
You also eliminate the high costs of stock picking.
The book has references to many clever investors whose beliefs have stood the test of time. This is a good one from The Economist:
“The truth is that, for the most part, fund managers have offered extremely poor value for money. Their records of outperformance are almost always followed by stretches of underperformance.
“Over long periods of time, hardly any fund managers have beaten the market averages. They encourage investors, rather than spread their risks wisely or seek the best match for their future liabilities, to put their money into the most modish assets going, often just when they become overvalued.
“And all the while they charge their clients big fees for the privilege of losing their money … (One) specific lesson … is the merits of indexed investing … you will almost never find a fund manager who can repeatedly beat the market. It is better to invest in an indexed fund that promises a market return but with significantly lower fees.”