The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits)

Investors pay far too little attention to the costs of investing. It’s especially easy to underrate their importance under today’s three conditions: (1) when stock market returns have been high (since 1980, stock returns have averaged 11.5 percent per year, and the average fund has provided a nontrivial—but clearly inadequate—return of 10.1 percent

That leaves just 10 mutual funds—only one fund out of every 35—that outpaced the market by more than one percentage point per year. Let’s face it: those are terrible odds! What’s more, the margin of superiority of eight of those 10 funds over the S&P 500 was less than two percentage points per year, a superiority that may have been due as much

Although Benjamin Graham is best known for his focus on the kind of value investing represented by the category of stocks he described as “bargain issues,” he cautioned, “the aggressive investor must have a considerable knowledge of security values—enough, in fact, to warrant viewing his security operations as equivalent to a business enterprise .

Avoid complexity and rely on simplicity and parsimony, and your investments should flourish.

Professional investment advisers are best at providing other valuable services, including asset allocation guidance, information on tax considerations, and advice on how much to save while you work and how much to spend when you retire. Further, most advisers are always there to consult with you about the financial markets.

The true investor . . . will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.

“All that money you’ve paid to those Helpers and all those unnecessary extra taxes you’re paying come directly out of our family’s total earnings and dividends. Go back to square one, and do so immediately. Get rid of all your brokers. Get rid of all your money managers. Get rid of all your consultants. Then our family will again reap 100 percent o

To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.”

For the defensive investor who required assistance, Graham originally recommended professional investment advisers who rely on “normal investment experience for their results . . . and who make no claim to being brilliant [but] pride themselves on being careful, conservative, and competent . . . whose chief value to their clients is in shielding th