Book Review: Bogle On Mutual Funds

Bogle On Mutual Funds:  New Perspectives For The Intelligent Investor, by John C. Bogle

As someone who is pretty familiar with the author’s books [1], this book was a pretty obvious choice to read.  As someone who enjoys Bogle’s perspective, why wouldn’t I want to hear what he has to say about mutual funds?  Even when he brags about his positive book reviews and even his not-so-positive book reviews, the author is endearing and surprisingly humble and deeply interested in encouraging smarter behavior among investors.  There is, as one might expect, a combination of familiar things as well as mild surprises with this book, and that is precisely the way I prefer it.  Those who appreciate Bogle’s taste for literary allusions will find much to enjoy here and those who appreciate mathematical and statistical approaches to investing will find much to enjoy and appreciate here too.  Of course, not everyone is going to be happy about this book, namely those who favor a more aggressive approach to investing that benefits brokers and not investors, but for those of us who are looking to have a fair and conservative return will find a lot of wisdom here and that is something to appreciate, making it no mystery why this book is considered an investment classic.

This book of a bit more than 300 pages begins with a somewhat lengthy preface where the author shares his thoughts and reflections on the book and its continued value and where the book sits among other related books on investing.  After that the book is divided into four parts.  The first part looks at the building blocks of investing (I) with chapters on the rewards (1) and risks (2) of investing along with the principles, practicality, and performance of mutual funds (3).  After this comes some chapters on mutual fund selection (II) including how to select mutual funds of common stocks (4), bonds (5), money markets (6), and balanced investments (7), as well as where to get mutual fund information (8).  The third part of the book looks at some perspectives on three key issues (III) including index funds (9), mutual fund costs (10), and the issue of taxes (11).  The fourth and final part of the book looks at the practical application of investment principles (IV) with chapters on the allocation of assets (12), some model mutual fund portfolios (13), and a mandate for fund shareholders not to be automatic votes for fee increases (14), with a closing epilogue on some principles of wisdom.

There are a few elements to this book that help make it even better.  The author gives some very practical and very granular advice concerning the mix of stocks and bonds people should have at different areas in their investment life.  Every chapter includes a few sidebars that the author labels as caveat emptor to help the reader understand different aspects of investing that are worth paying attention to but that are not part of the main theme of the chapter.  The author includes a lot of charts and some attempts to change the way people think about risk and the connection between a given mutual fund and an index that would help an investor know certain key aspects about the funds they might invest in.  Above all, the author has some very clear goals, in that he wants investors to be more aware and more active in terms of their interaction with others while maintaining a cautious approach that understands the risks being dealt with and does not panic nor seek to greedily earn more than the market as a whole.  And these are reasonable goals told well in a way that is both informative and deeply interesting.

[1] See, for example:

https://edgeinducedcohesion.blog/2018/11/06/audiobook-review-the-little-book-of-common-sense-investing/

https://edgeinducedcohesion.blog/2018/10/29/book-review-the-battle-for-the-soul-of-capitalism/

https://edgeinducedcohesion.blog/2018/10/29/book-review-enough-true-measures-of-money-business-and-life/

About nathanalbright

I'm a person with diverse interests who loves to read. If you want to know something about me, just ask.
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