Book Review: Common Sense on Mutual Funds

Common Sense on Mutual Funds Book CoverIt took me a bit longer than I thought, but I finally wrapped up Common Sense on Mutual Funds by John C. Bogle. Overall, I liked the book, but not as much as some of the others I have read. The first three Parts have to do with Investment Strategy, Choices, and Performance. Basically, costs are most important, you can’t beat the market on average, and Indexing is best. This part of the book was so-so, it wasn’t superbly organized. I felt like The Four Pillar of Investing did a much better job presenting Indexing as the best approach to long-term investing, with A Random Walk Down Wall Street a close second and a better overall primer.

Part 3 deals with the mutual fund industry. This part is the most interesting, as it goes into the mutual funds industry and how it isn’t really “mutual”. The fund shareholders and the corporate shareholders want different things – low fees and high performance vs. fees and… more fees. And guess who usually wins? Fund companies now focus more on marketing than anything else. Part 4 talks about the creation of The Vanguard Group and it’s vision. It’s a bit feel-good, but a decent read. If you’re already sold on indexing and low costs, I’d only read Part 3 of this book and skip the rest – you won’t find anything really new here.


  1. Reading chapter 8 on global investing. Looks like you disagree with has asset allocation advice. Essentially he adds up currency risk, lack of intl funds ability to mitigate market risk, and the strong past performance of domestic over intl funds and says he feels comfortable with no foreign holdings (that what it sounds like to me). He states that if you fall on the side of believing intl will help in mitigating risk or diversifying to keep holdings to a maximum of 20% of investments. Have you written about this?

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