The Bogleheads' Guide to Investing

I read this book quickly shortly after I got it, and I was blown away. Many reviewers pick this as a book for "beginners", but I don't agree with that. My background: I have read (and own) dozens of investment books. I have subscribed to many newsletters (including Morningstar's, which is decent but unnecessary after you read this book). I have owned many individual stocks and for the last 2-3 years before I got the Boglehead religion I was lucky and beat the market averages buying individual stocks (although for most of my life I've lagged far below the market). I opened my first brokerage account in 1990, and I've been self-directed ever since. I've had 400%+ years as well as -70% years. I've even been in the top 100 virtual mutual funds on Marketocracy (out of 70,000), and I've written custom software to analyze the daily performance of the top 1500 stocks. Having said all that, I wish that I had followed the investment principles laid out in this book from the very beginning. I would have a lot more money than I do now. Before reading this book, I already had all my retirement money in Vanguard index funds. So you would think, end of story, you're already a believer. NOT SO! While I started out using the Target Retirement funds, which allocates your money properly for your age, I slowly deviated from those funds into the higher risk emerging markets index fund, because that fund was doing so well. It's easy to read this book and say, "oh that makes sense", stay the course for a year or so, then get seduced by the hot performance of a particular sector and lose your way. For these principles to work, you really have to apply them relentlessly, and I think that it takes either someone with an iron discipline or someone who's acquired "experience" in the market (i.e., losses that hurt) to recognize the wisdom of this book and follow it. Years ago, I read John Bogle's book on index funds, and I agreed with the logic of what he was saying. Then I proceeded to ignore it for most of my investing career before I really "got" what he was saying. Perhaps, if you're a beginner, you'll follow this book and avoid the pain and losses. The principles are easy enough to understand. In fact, if you want to save the price of the book, simply go to Vanguard, pick your retirement date, buy a "Target Retirement" fund for that date, and you're done. That's pretty much what the book tells you to do. BUT, you'll need the book (and, in my opinion, the "experience" of following the 99% of the misleading advice out there) to really understand why this is the real way to go. You almost have to read this book every year as an antidote to the temptation that assaults you nonstop from Wall Street and CNBC and all the financial magazines. If you're a beginning investor, this is it. This book is the mother lode. You can stop looking. Unfortunately, it may take you 10-15 years and many large losses to realize this (as I had to do), but take it from me (some random ano

Most people don't have time to read dozens of books about personal finance and investing. Even if people did have that much time, they would seldom be able to integrate what different authors had to say into a consistent approach. For several decades, people have been asking me what one book they could read to be more successful with their personal finances. Until now, I've been reluctant to pick any one book. Instead, I would usually provide a list of 6-8. Having read The Bogleheads' Guide to Investing, I can now safely recommend one book for the first time: This one! Taylor Larimore, Mel Lindauer and Michael LeBouef have five important advantages over other personal finance authors: 1. They are experienced investors. 2. They are well read on the subject of personal finance. 3. They've been answering questions for years from those who want to know what to do on Morningstar Vanguard forum and its related site, diehards.org 4. They are an expert writing team rather than a writer or celebrity trying to be supported by experts. 5. They aren't trying to sell you anything except their book which makes their advice more independent than usual. The book's range is impressive. Part I looks at the essential elements of successful investing and includes looking at your financial lifestyle, how to start investing young and regularly, different types of financial instruments, inflation-protected bonds, investing minimums, avoiding complications that lose you money, asset allocation, reducing costs, minimizing and deferring taxes, diversification, market timing, money for college, employing a windfall and whether to retain a financial advisor. Part II looks at how to track your progress and rebalance assets, staying immune from daily "news" about investing, being in control of your emotions, building up enough money for retirement, asset protection through insurance and estate planning. The book tackles head on a lot of the bad advice you get about investing, while also being realistic about how much time and effort most of us want to put into financial planning. The tone is friendly, the advice is good and the warnings are appropriate. What more can you expect from the only personal finance book you'll ever need?

The Bogleheads'Guide is easy to read and can help investing "newbies" develop a plan that works for them (rather than just for investment salespeople). The Guide also contains quite a bit of information of interest to more advanced investors, including an entire section on follow-through strategies to keep you on target (including chapters on tracking progress, keeping your focus, keeping your emotions from undermining your investments, making your money last through retirement, keeping adequate insurance, and passing on your estate). The book is backed up by the "Bogleheads" web site that provides friendly and comprehensive assistance on investment issues and concerns. I have recommended this book to my extended family and recommend it highly!

I was very impressed with this book and give it an A+. Not only is the investing advice excellent, the writing style is very easy and fun to read. I have lurked in the back ground and seen the excellent advice the authors give on the Bogleheads web site (www dot Bogleheads dot org) each day. Their common sense sound advice is carried over from the web site to this book. I learned several new things from this book. After concentrating on saving and investing in large cap stock index funds and total bond market index funds for many years, I recently diversified into other small cap, mid cap, and large cap U.S. stock index funds versus just an S & P 500 index fund. I added an allocation to REITs as well. During this re-allocation, I ran into the problem of trying to keep bond index funds and REITs in tax-deferred versus taxable accounts. I was able to accomplish this, but it won't be long until I need to add more bond and REIT investments to keep my asset allocation correct. I am out of room to add more bond and REIT investments in my tax-deferred accounts. This book suggested that if you are in this situation, you should consider municipal bonds in taxable accounts due to their potential for escaping both state and federal taxation. I had always "blown off" municipal bonds as not fitting into my investment plans, but now I have definitely put them on my radar screen as a future possibility. The book also did a good job of explaining the details of rebalancing. I especially enjoyed a new term I had not seen before, "Financial Pornography". This is all the daily noise one hears from CNBC and the financial magazines about picking stocks or mutual funds to "beat the market". All-in-all, a great book for serious investors who manage their own portfolios. I would suggest companion books to supplement this book including: The Richest Man in Babylon Bogle on Mutual Funds: New Perspectives for the Intelligent Investor The Millionaire Next Door The Four Pillars of Investing: Lessons for Building a Winning Portfolio A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition Index Mutual Funds: How to Simplify Your Financial Life and Beat the Pro's The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life Wealth: Grow It, Protect It, Spend It, and Share It All About Asset Allocation.