Bogle On Mutual Funds
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Bogle On Mutual Funds

New Perspectives For The Intelligent Investor

John C. Bogle

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šŸ“– eBook - ePub

Bogle On Mutual Funds

New Perspectives For The Intelligent Investor

John C. Bogle

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About This Book

The seminal work on mutual funds investing is now a Wiley Investment Classic

Certain books have redefined the way we view the world of finance and investingā€”books that should be on every investor's shelf. Bogle On Mutual Fundsā€”the definitive work on mutual fund investing by one of finance's great luminariesā€”is just such a work, and has been added to the catalog of Wiley's Investment Classic collection. Updated with a new introduction by expert John Bogle, this comprehensive book provides investors with the wisdom of the pioneer of mutual funds to help you identify and execute the ideal mutual fund investment choices for your portfolio.

The former Vanguard Chief Executive, Bogle has long been mutual funds' most outspoken critic; in this classic book, he provides guidance on what you should and shouldn't believe when it comes to mutual funds, along with the story of persistence and perseverance that led to this seminal work. You'll learn the differences between common stock, bond, money market, and balanced funds, and why a passively managed "index" fund is a smarter investment than a fund managed by someone making weighted bets on individual securities, sectors, and the economy. Bogle reveals the truth behind the advertising, the mediocre performance, and selfishness, and highlights the common mistakes many investors make.

  • Consider the risks and rewards of investing in mutual funds
  • Learn how to choose between the four basic types of funds
  • Choose the lower-cost, more reliable investment structure
  • See through misleading advertising, and watch out for pitfalls

Take a look into this timeless classic and let Bogle On Mutual Funds show you how to invest in mutual funds the right way, with the expert perspective of an industry leader.

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Part I provides basic background information on the rewards of investing, the risks of investing, and the principles and practicalities of investing through mutual funds.
If you are an experienced investor, well-acquainted with the financial markets and the mutual fund industry, you may wish merely to browse through the material in this section. However, I believe that, even for knowledgeable investors, each chapter will provide at least several new perspectives on familiar financial issues.

Chapter One
The Rewards of Investing
The Magic of Compounding

ā€œThe greatest mathematical discovery of all time.ā€ That is how Albert Einstein is said to have described compound interest. This first chapter emphasizes the magic of compoundingā€”the interaction of rate of return and timeā€”in the search for optimum long-term rates of return on your financial assets. I believe virtually every financial goal you may haveā€”building capital, obtaining income to meet your day-to-day financial needs, saving for your child's college education, putting away money for your retirement, or any other wealth-building purposeā€”can be met through a disciplined approach to the ownership of financial instruments.
This is, first and foremost, a book about mutual funds and the mutual fund industry. To set the stage, I will discuss the fundamentals of the different classes of financial assets and their unique investment characteristics. While this is not a textbook on the financial markets, I believe the intelligent, and ultimately successful, investor must consider and understand the three major categories of liquid financial securities: stocks, bonds, and cash reserves.
I hope this first part helps eliminate some of the mystery of the financial markets. This is no mean task. I have realized over the years that many individual investors regard the financial markets as enigmatic, occult, and driven by forces unseen. Mysterious though the markets may seem in the short run, in the long run it is the basic fundamentals of investing that determine the returns on financial assets. For stocks, returns are driven by earnings and dividends; for bonds and money market instruments, by interest coupons over specified periods. It is the reality of underlying financial forces, not the illusion of superficial emotionsā€”optimism and pessimism, hope and fear, greed and satisfactionā€”that is at the heart of intelligent investing.


The magic of compound interest is simply a combination of time and rate of return. Let us begin by taking a truly long-term look at the financial markets. Complete data tracing the returns on financial assets are available beginning in 1872. I use primarily the Standard & Poor's 500 Composite Stock Price Index (and a predecessor index prior to 1926) as the measure of common stock returns, the long-term (20-year) U.S. government bond as the measure of bond returns, and the 90-day U.S. Treasury bill as the measure of the returns on cash reserves.
During the 1872ā€“1992 period, the annual return on U.S. common stocks averaged +8.8%, the annual return on long-term bonds averaged +4.6%, and the annual return on cash reserves averaged +4.2%. The differences in returnsā€”which may appear smallā€”result in a staggering dispersion in the final value of $1 invested in each asset ...

Table of contents

Citation styles for Bogle On Mutual FundsHow to cite Bogle On Mutual Funds for your reference list or bibliography: select your referencing style from the list below and hit 'copy' to generate a citation. If your style isn't in the list, you can start a free trial to access over 20 additional styles from the Perlego eReader.
APA 6 Citation
Bogle, J. (2015). Bogle On Mutual Funds (1st ed.). Wiley. Retrieved from (Original work published 2015)
Chicago Citation
Bogle, John. (2015) 2015. Bogle On Mutual Funds. 1st ed. Wiley.
Harvard Citation
Bogle, J. (2015) Bogle On Mutual Funds. 1st edn. Wiley. Available at: (Accessed: 14 October 2022).
MLA 7 Citation
Bogle, John. Bogle On Mutual Funds. 1st ed. Wiley, 2015. Web. 14 Oct. 2022.