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Costs & staying the course

The Little Book of Common Sense Investing

John C. Bogle

Costs are the one certainty in an uncertain market - own the whole market cheaply and let the tyranny of fees work for you, not against you.

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Chapters

14
  1. Chapter 01A ParableAll investors together own all the companies, so as a group they earn what the businesses earn - minus everything paid to the helpers.Read this chapter →
  2. Chapter 02Cast Your Lot with BusinessOver the long run the market simply hands back what businesses earn - dividends plus growth - while the crowd's mood adds only noise.Read this chapter →
  3. Chapter 03Winner's Game to Loser's GameOwning all businesses is a winner's game, but the fees and trading costs paid to try to beat the market turn it into a loser's game.Read this chapter →
  4. Chapter 04Focus on the Lowest-Cost FundsThe more managers take in fees, the less you keep - cost is the single most reliable predictor of which funds win.Read this chapter →
  5. Chapter 05Dividends Are the Investor's FriendDividends supply a huge slice of long-run return, and high fund fees quietly eat much of the dividend you were owed.Read this chapter →
  6. Chapter 06The Grand IllusionThe returns funds advertise are not the returns investors pocket, because people pile in after gains and flee after losses.Read this chapter →
  7. Chapter 07Taxes Are Costs, TooActive funds trade a lot, and every trade can trigger a tax bill that further shrinks what you keep.Read this chapter →
  8. Chapter 08When the Good Times No Longer RollFuture market returns are likely lower than the past, which makes every rupee lost to cost hurt far more.Read this chapter →
  9. Chapter 09Don't Look for the NeedleLast year's hot fund almost always cools off, so chasing winners - or paying an advisor to pick them - is a losing habit.Read this chapter →
  10. Chapter 10The Majesty of SimplicityThe whole plan is one sentence - own a single low-cost fund holding the entire market, and hold it forever.Read this chapter →
  11. Chapter 11Bonds, ETFs, and Smart BetaThe low-cost rule applies to bonds too; ETFs are fine only if you never trade them; 'beat-the-market' index funds are costly marketing.Read this chapter →
  12. Chapter 12What Graham Thought of IndexingEven Benjamin Graham, the father of stock-picking, told ordinary investors to just buy a low-cost index of the whole market.Read this chapter →
  13. Chapter 13Asset Allocation and RetirementSplit your money between stocks and bonds to match your age and nerves, then rebalance and draw it down slowly in retirement.Read this chapter →
  14. Chapter 14Advice That Meets the Test of TimeThe enduring rules are simple: own the market, keep costs low, don't try to time it, and stay the course through every storm.Read this chapter →

This is my own plain-English understanding of the book’s ideas, in my own words with my own ₹ examples, laid out against the book’s real chapters so you can relate the two. It is not the book and reproduces none of its text - if it helps, please buy the book. Not affiliated with the author or publisher. The author is not SEBI-registered; nothing here is investment advice.