Bogle is a legend. He was the founder of the Vanguard group, which changed the way one invested by focusing on exchange traded funds (ETFs). The book has some of the speeches he made over a four-decade span from the 1970s which will give you a ringside view of how things were then and how things changed over the years. There is plenty to gain from reading this book. It gives you an insight about how to go about investing for the long term, the importance of indexing, the critical effect of costs on investment returns, and the importance of diversification, which are widely covered in this book.
Some of the aspects that will go a long way in imbibing include simplicity and focus as an investor. He goes on to explain simplicity as buying the whole market—an index capable of matching the market. For focus, he mentions looking at earnings, dividends, and interest yields rather than price with high PE multiples. But the lesson to live is the two principles suggested when dealing with risk. First, get your asset allocation right by maintaining a longterm horizon and stay the course and second, diversify some of the risk away by introducing equities with reliable, different correlations with the markets. For those who are curious, there is also Bogle’s university thesis on the role of an investment company included in the book which gives insights into what made the man such a legend. Read this book and you are likely to read his other books as well.
Author - John C. Bogle
Publisher - Wiley India
Price - Rs 499
