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Common Sense on Mutual Funds

Book Review

 

Title:

Common Sense on Mutual Funds

Author:

John C. Bogle

Publisher:

Penton Overseas, Inc., Carlsbad, CA

ISBN:

1-56015-952-9

Reviewed By:

Frank Fogg

Review Date:

July, 2000

Rating:

Common Sense on Mutual Funds is an audio book by John C. Bogle, a founder and chairman of the Vanguard group  of mutual funds. This audiobook is a three CD set of approximately three hours  length and it is also available on cassette tape or as a hardcover book.

For those that have never listened to an audiobook before, this is a good one to start with. Three or four days of commuting in the car are enough to get through the book. The material in this book is aimed at the beginning and intermediate level investors and is  well adapted to learning while on the run. The contents are presented in plain  English that the average person will have no problem understanding and the reader  has a clear and interesting voice that keeps your attention.

Get more information about Common Sense on Mutual FundsAlthough the title suggests that this book is only for those that are interested in mutual  funds, the text itself goes into more detail about how the entire stock market  operates, making it essential reading for all new investors. It illustrates  the difference between market performance in an efficient market as opposed  to an inefficient market model, and explains the reasons that most mutual funds underperform the market averages. The different types of mutual funds are explained  in detail along with the advantages and disadvantages of each.

Mr. Bogle presents a strong argument for the use of index funds as the main component of an investment portfolio.  He demonstrates the logic of his argument by using examples of successful investment strategists that use a methodology similar to his concept. He also provides  concrete reasons why many of the other types of funds will, in the long run,  not do as well as an index fund. The effect of fund costs and taxes relative to investment results are clearly explained in several chapters.

Following the strategies that John C. Bogle provides in this book is sure to save any investor thousands of dollars in fees and taxes. The text provides a greater level of understanding about how mutual funds operate and a multitude of ways to simplify an investment portfolio while maximizing its return. This book is essential reading (I mean listening) for those investors that are just starting their portfolios and others that  are seeking better investing strategies.

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