Everybody knows that asset allocation is the only significant factor in portfolio performance. Right?
Well, no. Bogle starts with the Jahnke research article "The Hoax Of Asset Allocation" and piles on mountains of his own research to demonstrate beyond doubt that cost is what really matters in every asset class imaginable.
That being the case, indexing is the only rational investment strategy because index funds (and, these days, index ETFs) have by far the lowest costs.
This edition was written before the dot-com crash; the revised edition will make for fascinating reading: which views have changed, which have been reinforced?
It's a little hard to know who Bogle's intended audience is.
The analysis is too deep for casual reader/investors (I might even say that you need to share his enthusiastic obsession to get through it all).
Plus, he is so intent on proving how important cost is that he gives such matters as diversification virtually no attention except to say that it's a good thing. Unless you agree with the implication that you should simply buy Vanguard's Balanced Index Fund (VBINX) and be done with it, you will need to look elsewhere for advice on matters other than cost.
Bogle devotes the last third of the book to a discussion of how the fund industry should restructure itself to better serve the investor. Since it obviously won't ever happen that sheep will not get shorn, it's rather sad and quixotic.
In fact, considering the sad state of affairs at TIAA/CREF, once a bastion of customer service now gone to hell for the sake of corporate profits, it's worrisome to consider whether Vanguard will go down that same road once the old man is safely out of the picture.
The end of the book is a brief autobiography of his creation, Vanguard, and the index fund that rocked the world.
I think Bogle is the best. An inspiring example for the ages who single-handedly created the opportunity for individual investors to succeed. I come to his book with that bias and I slogged through it all because of my admiration. Not everyone will be sufficiently motivated to put in the effort, however, even though they would be rewarded for it if they did.
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Top reviews from other countries
Harvey Specter
HAS PROBABLY PREVENTED ME FROM LIVING IN POVERTY IN THE FUTURE
Reviewed in the United Kingdom on May 18, 2015