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The definitive book on index investing you must read

The Little Book of Common Sense Investing is a masterpiece. If you are keen to invest in stocks or bonds but don't know where to start this book provides you a great overview on how you should invest your money.

Jack Bogle is the Godfather of index investing and founder of Vanguard. Why I admire his writings is because he shares the same philosophy as I do. That is, first of all he stresses the difference between short-term speculation and long-term investing. Put simply, I truly support his statement saying that the stock market returns consists of two parts: the real returns which are based on real products and services sold by the companies and speculative returns which are not based upon real things but only the short-term emotions of the market. With the help of empirical stock market data Jack proves that over the long-run only real returns are what drive the stock market. The speculation component can provide exceeding gains or loses but only over short periods.

It is interesting to see that Jack shares the same investment philosophy with other great experts like Warren Buffett, Benjamin Graham or David Swensen. With Vanguard Jack came up with the first total US stock market index fund which still is one of the biggest of its kind. Most Nobel laureates invest in this very same fund because index investing is by far the best investment advise you will get.

I often got questions from a lot of people with various professions seeking for advice on how to best invest their money. I always stressed that Dividendo is not an investment advisory firm but rather an education platform where you can enable yourself to make your own rational investment decision. If you read The Little Book of Common Sense Investing you are definitely well prepared to make first investment decisions yourself. It summarizes many of the great achievements from the brightest experts in finance and gives clear advice what you should do.

The book is available in both English* and German*.

*Amazon Partner-Link