The Little Book of Common Sense Investing

SUCCESSFUL INVESTING IS ALL about common sense.

Simple arithmetic suggests, and history confirms, that the winning strategy is to own all of the nation’s publicly held businesses at very low cost.

After the deduction of the costs of investing, beating the stock market is a loser’s game.

Over the long term, stock market returns are created by real investment returns earned by real businesses—the annual dividend yield on publicly held U.S. corporations, plus their subsequent rate of earnings growth.

Get rid of all your Helpers. Then our family will again reap 100 percent of the pie that Corporate America bakes for us.

Don’t take my word for it.

I see no reason why investors should be content with results inferior to those of an indexed fund.

The best way to implement this strategy is indeed simple: Buying a fund that holds this market portfolio, and holding it forever.

Thanks to the miracle of compounding, the accumulations of wealth over the years generated by those returns have been little short of fantastic.

For investors as a group, returns decrease as motion increases.