Common Sense Investing - John C Bogle (2)

Here are some more quotes from the book:

Managed mutual funds are astonishing tax inefficient.

Fund returns are devastated by costs, taxes and inflation.

Common sense tells us that we are facing an era of subdued returns in the stock market.

If rational expectations suggest future annual returns of about 7 percent on stocks, what does this imply for returns on equity funds?

Unless the fund industry begins to change, the typical actively managed fund appears to be a singularly unfortunate investment choice.

Only three out of 355 equity funds that started the race in 1970 (i.e less than 1%) have survived and mounted a record of sustained excellence.

Before you rush out to invest in these three funds with such truly remakrable long-term records, think about the next 35 years.

Funds with long serving portfolion managers and records of consistent excellence are the exceptions rather than the rule in the mutual fund industry.

"The first shall be last." And they were.

The stars produced in the mutual fund field are rarely stars; all too often they are comets.

Average return of funds recommended by adviers: 2.9 percent per year. For equity funds purchased directly: 6.6 percent.

The New York Times contest: Funds chose by advisers earned 40 percent less than an index fund.

Index funds endure, while most advisers and funds do not.

Common sense tells us that performance comes and goes, but costs go on forever.

The index fund's risk adjusted return: 194 percent: average managed fund, 154 percent.

All indexed funds are not created equal. One xample: the difference between $122,700 and $99,100.

Your index fund should not be your manager's cash cow. It should be your own cash cow.

In inefficient markets, the most successful managers may achieve unusually large returns. But common sense tells us that for each big success, there must also be a big failure.