Common Sense on Mutual Funds by Bogle, John C. -- Read -- Imperial Library of Trantor

Index

Praise Title Page Copyright Page Dedication Foreword Foreword for the Original Edition

Why This Book Is Unique

Preface to the Original Edition

“Common Sense” Defined A Five-Part Approach Common Sense Redux Principles and Practices

Acknowledgements Acknowledgments for the Original Edition About the Author Part I - ON INVESTMENT STRATEGY

Chapter 1 - On Long-Term Investing

Chance, the Garden, and Long-Term Investing How Has Our Garden Grown? Stock Market Returns Bond Market Returns Planting Seeds for Growth The Financial Markets Are Not for Sale Practice Departs from Principle Simple Principles for Long-Term Success

Chapter 2 - On the Nature of Returns

Occam’s Razor and the Stock Market Occam’s Razor and the Bond Market Precision and Perversity How Important Is It to Forecast Future Returns?

Chapter 3 - On Asset Allocation

From the Talmud to Modern Portfolio Theory Risk to the Fore Benefiting from Balance A Third Dimension Financial Scripture Three Perspectives on the Impact of Cost Is It Cost or Asset Allocation?

Chapter 4 - On Simplicity

When All Else Fails, Fall Back on Simplicity Simplicity in Your Stock Portfolio Rule 1: Select Low-Cost Funds Rule 2: Consider Carefully the Added Costs of Advice Rule 3: Do Not Overrate Past Fund Performance Rule 4: Use Past Performance to Determine Consistency and Risk Rule 5: Beware of Stars Rule 6: Beware of Asset Size Rule 7: Don’t Own Too Many Funds Rule 8: Buy Your Fund Portfolio—and Hold It The Paradigm of Simplicity

Part II - ON INVESTMENT CHOICES

Chapter 5 - On Indexing

Indexing Is a Long-Term Strategy The S&P 500 Index Is Not the Market Indexing Wins Largely Because of Cost The Index Fund Is Much Better Than It Appears The Thorny Issue of Risk All Index Funds Are Not Created Equal Indexing Works in All Markets The Triumph of Indexing

Chapter 6 - On Equity Styles

Enter Tick-Tack-Toe Comparing Apples to Apples Equity Funds—Risks, Returns, and Costs God, Pascal, and War Games

Chapter 7 - On Bonds

Misery Loves Company A Flagrant Example How Much Does Cost Matter? What about Management Skill? Sales Charges Exacerbate the Cost Issue How to Avoid Excessive Costs

Chapter 8 - On Global Investing

The Global Portfolio Extreme Currency Risk—and Returns The Global Efficient Frontier International Economies and Financial Markets The Record of Global Investors Constructing Your Own Global Portfolio Indexing in International Markets—A Better Way? The Accidental Tourist “Acres of Diamonds” Revisited

Chapter 9 - On Selecting Superior Funds

The Equity Fund Record Enter the Index Fund The Index Fund Elicits a New Industry Mantra Selecting Winning Funds—An Academic Activity Funds That Have Beaten the Market—The Disappointing Reality The Investment Advisers Who Select Funds—Another Disappointment Returns of Funds of Funds—Yet Another Disappointment No Holy Grail Here—Academic or Pragmatic

Part III - ON INVESTMENT PERFORMANCE

Chapter 10 - On Reversion to the Mean

Mutual Fund Champions Come Down to Earth Gravity and Stock Market Sectors Common Stocks Return to Earth, Too Investing to Cope with the Force of Gravity The Crown Jewels

Chapter 11 - On Investment Relativism

A Powerful Bogey The Rise of Closet Indexing The Index Fund: Villain of the Piece? We’re All Quants Now Measuring Managers—Where Does Your Manager Stand? “If You Can’t Beat ’Em, Join ’Em”

Chapter 12 - On Asset Size

Isn’t Bigger Better? Size and Fund Investment Returns Real Size, Real Problems What’s Size Got to Do with It? Nothing Does Succeed Like Success—for Fund Managers To Dream the Impossible Dream You Can Make the Dream a Reality

Chapter 13 - On Taxes

Taxes—The Industry’s Black Sheep Alpha Takes Another Hit . . . from Taxes Fund Portfolio Turnover Soars Fund Manager Turnover Doesn’t Help A Good Solution: The Index Fund A Better Solution: The Tax-Managed Fund A New Idea, Sixty Years Old Tax Strategies The Parallax View

Chapter 14 - On Time

Reward—The First Dimension Risk—The Second Dimension Cost—The Third Dimension Time—The Fourth Dimension The Dimensional Imperative

Part IV - ON FUND MANAGEMENT

Chapter 15 - On Principles

Distribution Drives the Industry Management versus Distribution Information That Can Make a Difference in Your Fund Investments Esperanto-Type Cranks

Chapter 16 - On Marketing

Your Money Is No Object 12b-1 Fees—Full Disclosure Hawking Products, Hiding Risk Owners versus Customers? The True Business—Gathering Assets

Chapter 17 - On Technology

Investment Technology—Bigger, Quicker, and More Complex Information Technology—Information versus Wisdom Transaction Technology—Switch When the Iron Is Hot The Report Card The Pervasive Impact of Technology

Chapter 18 - On Directors

The Levers of Control The Consequences of Control What the Law Says An Alternative Structure Legal Action Coming? Congress and the SEC Summing Up

Chapter 19 - On Structure

Contrasting Ownership Structures History in the Making Strategy Follows Structure Looking to the Future The Information Age to the Rescue Revision or Restructuring?

Part V - ON SPIRIT

Chapter 20 - On Entrepreneurship

I Meet a True Entrepreneur A Merger, a Firing, an Idea Steps and Stumbles Schumpeter Describes the Entrepreneur A Slice of the World in Context

Chapter 21 - On Leadership

The Majesty of Simplicity A Fortuitous History Readiness and Foresight, Purpose and Passion Servant Leadership Failure and Determination Patience and Courage Fate Takes a Hand

Chapter 22 - On Human Beings

The Investor as Human Being Shareholders Respond The Vanguard Crew The Award for Excellence: Even One Person Can Make a Difference Partnership: Sharing the Fruits of Our Labors The Golden Rule

Afterword Appendix I - Some Thoughts about the Current Stock Market as 2010 Begins Appendix II - Some Thoughts about the Current Stock Market as 1999 Begins Notes Index

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