The World's Best Book Summaries
How does your mindset influence your financial success? How can you shed your self-sabotaging beliefs about money and adopt a rich mindset? The beliefs you hold about money greatly affect your financial outcomes. If you have a poverty mindset, you’ll end up poor even if a large sum of money lands in your lap (e.g. through inheritance or winning a lottery). Here’s how you can transcend the beliefs and ideas about money that keep you stuck in poverty.
What is equity in stock trading? How do investors earn profit from publicly traded equities or stocks? Broadly speaking, equity is the part of a company that belongs to its owners. When companies are publicly traded, investors can acquire partial equity in them by purchasing shares of their stock. Keep reading to learn how equity investing works.
What percentage of your portfolio should be comprised of bonds? What are some things you should consider when deciding on how much to invest in bonds relative to stocks? There’s no universal, ideal stocks-to-bonds ratio in a portfolio. When it comes to asset allocation, the rule of thumb is to base it on your financial circumstances and your risk tolerance. Here’s how to decide how much to invest in bonds relative to equity, according to Jack Bogle.
Do mutual funds charge fees? How much should you expect to pay in mutual funds fees? What other costs and charges should you expect to incur when investing in a mutual fund? Before investing in mutual funds, it’s important to consider all the fees and charges you’ll incur. Unlike index funds, mutual funds are actively managed so they incur significant costs for investors. Here are three areas where mutual funds cost more than index funds: expense ratios, sales charges, and portfolio turnover.
Why are Microsoft and OpenAI working together? What is generative AI? What are the pair’s plans for this year? Last month, Microsoft announced it would be investing $10 billion in OpenAI, which began as a nonprofit research lab in 2015 and now predicts it will produce $200 million in revenue this year. Even as Microsoft and OpenAI race to cash in on generative AI, they still face potential roadblocks moving forward. Read on to learn more about Microsoft, OpenAI, and the generative AI gold rush.
What is Jack Bogle’s The Little Book of Common Sense Investing about? What’s the key message to take away from the book? In The Little Book of Common Sense Investing, Jack Bogle outlines the reasons why investors typically make more money with index funds than actively managed mutual funds. Because the costs of mutual funds vastly outstrip those of index funds, Bogle argues that mutual funds deliver reduced returns, and those relative losses compound over time. Below is a brief overview of The Little Book of Common Sense Investing by John Bogle.
What is the portfolio turnover rate in mutual funds? How does a mutual fund’s portfolio turnover compare to turnover in index funds? Portfolio turnover is the ratio of a portfolio’s total assets to its total purchases and sales. Because higher portfolio turnover creates more fees, such as commissions to stockbrokers, mutual funds cost investors more money due to their higher turnover rates. Keep reading to learn how to evaluate portfolio turnover rates.
Are index funds better than mutual funds? Can actively managed mutual funds outperform index funds in the long run? Some argue that, despite their higher costs, mutual funds could nonetheless be superior to index funds if they generated proportionately higher returns. In The Little Book of Common Sense Investing, Jack Bogle turns to historical data and statistical models to disprove this misconception. Here’s why mutual funds generate significantly lower returns for investors than index funds.
What is stock market volatility? Can volatility be a good thing? Stock market volatility is the rate at which stock prices fluctuate over a period of time. While modern investment portfolios are designed to hedge against volatility as a way to handle risk, market volatility is a tool that can be exploited. Keep reading to learn how to leverage stock market volatility, according to Warren Buffett.
What’s the difference between an index vs. mutual fund? How do index funds and mutual funds make money for investors? Traditional index funds own shares of an entire market (e.g. the S&P 500) and aim to generate market-average returns. In contrast, mutual funds own shares of companies selected by their analysts and aim to generate profits by beating the market returns by buying and selling stocks at opportune moments. Keep reading to learn how index funds differ from actively managed mutual funds.