Money Archives

The Little Book of Common Sense Investing by Jack Bogle

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 Turnover Rate in Mutual Funds? Explained

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?

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.

Stock Market Volatility: Can It Be a Good Thing?

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.

Index vs. Mutual Funds: What’s the Difference?

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.

How to Predict Stock Market Performance

Can you predict the stock market? What are some things you should look out for before buying a stock? It’s difficult to make more money than an average investor in the market. This is because everyone is working with the same information. However, if you know how to predict stock market performance, you can make above-average gains. In this article, you’ll learn what to look for when trying to gauge what’s going to happen in the stock market as a whole as well as with individual stocks.

Berkshire Hathaway’s Business Philosophy Explained

What kind of company is Berkshire Hathaway? What is Berkshire Hathaway’s business philosophy? Berkshire Hathaway is a multinational holding company run by Warren Buffett. Buffett takes the time to explain the reasoning and philosophies behind everything he does as Berkshire’s CEO so that his shareholders can fully understand the company that they own. Keep reading to learn about Berkshire Hathaway’s business philosophy.

Should You Invest in Bonds?: Every Investor’s Dilemma

Should you invest in bonds? How do bonds compare to stocks in terms of return on investment? Historically, bonds have generated significantly lower returns than equity investments, or stocks: Annual returns on bonds have been 5.3% since 1900, while annual returns on stocks have been 9.5%. Despite that, the founder of the Vanguard Group Jack Bogle argues that bonds do belong in your portfolio. Here’s why you should invest in bonds, according to Bogle.

How Warren Buffett’s Investment Advice Goes Against the Grain

What is Warren Buffett’s approach to investing? What are the key pieces of Warren Buffett’s investment advice investors should take on board? Warren Buffett’s investment approach goes against the grain of many financial professionals’. Buffett himself points out where his views and those of other investors disagree. Three specific points of contention are Efficient Market Theory, diversified portfolios, and the supposed value of financial advisers. Keep reading to learn about the underpinnings of Warren Buffett’s approach to investing and how it differs from conventional practices.

Should You Invest in Mutual Funds?

Should you invest in mutual funds? Can actively managed mutual funds beat index funds? Index funds have consistently outperformed the majority of mutual funds since 1970. However, advocates of mutual funds argue that it only shows index funds are better than the average mutual fund. Here’s why index funds will always outperform mutual funds in the long run, according to Jack Bogle.