Reading this book in 2008 may probably make some people feel as though it is not saying anything new. It emphasises a number of things that have become common wisdom nowadays - that you should invest in index funds, not try to beat the market but focus on beating taxes and inflation, that almost 75% of the fund managers underperform the market etc..etc.
But that does not make the book a boring one. To me, it makes an interesting argument as to why we should not try to beat the market. In the 1960's, only about 10% of the investment in the stock market was done by institutional investors whereas the other 90% came from individual investors, who were not professional or savvy about investing. So, it gave a good chance for the institutional fund managers a good chance to beat the market because there were many opportunities for exploitation in the market. But, by the 1990's, about 90% of all the stock market investment was made by the institutional investors, who had access to all the latest data and technology to play the stock market. They all had full time professionals who had the latest algorithms for trading. Against such an array of managers, the ordinary investor stands little chance to beat them because the institutional investor is THE MARKET now! That is why Ellis says that we must just try to be satisfied with getting market returns as a safe measure. This is what he calls 'Winning the Loser's game'. The metaphor is drawn from non-professional tennis matches, where the winner is not the one who makes the brilliant winners but the one who makes less number of unforced errors. Another important point that Ellis makes is that 'Investing ought to start with the axiom that managing risk (which is what drives investment returns) is immeasurably more important than seeking market inefficiencies to exploit'. The other advice he gives us is:
'focus on minimizing expense ratios, investing in index mutual funds, and focus on long-term goals and the impact of inflation on your portfolio'.
I found this book extremely useful and intend following many of its suggestions.

My ratings of books on Goodreads are solely a crude ranking of their utility to me, and not an evaluation of literary merit, entertainment value, social importance, humor, insightfulness, scientific accuracy, creative vigor, suspensefulness of plot, depth of characters, vitality of theme, excitement of climax, satisfaction of ending, or any other combination of dimensions of value which we are expected to boil down through some fabulous alchemy into a single digit.

Makes a compelling argument for ditching expensive, fee-based, ineffectual actively-managed investments for low-cost market index-based mutual funds over a long-term investment horizon (20+ years.) Maybe a bit too "financial-ese" for some, but worth getting your head around.

It was a straightforward book promoting index investing. The author is a clear supporter of the efficent market theory and he argues the best way is for individuals to put their money in index fund and let the market allocate their money.

"As an investor, it is more rewarding to study investment history than to study the present market activity"—

two big factors dominate reality for investors: corporate profits (and the dividends they provide) and the price/earnings (P/E) ratio at which these earnings are capitalized"

"So we should keep reminding ourselves that a falling stock market is the necessary first step to our buying low"

For me personally, there was nothing new in this book that I haven't already read elsewhere. So while I didn't particularly enjoy it, I would recommend it for the average person who has a retirement account and needs to learn some basics. It contains some very basic and prudent investing advice. The basic premise is to invest properly, you must act like an amateur tennis player and make less mistakes. Professionals win points with their skill - amateurs lost fewer points than their opponents.

What does this means in practical terms? Mainly, get involved. You must take charge of your investments and your future. Keep a close eye on fees (low cost ETF's are a great option). Third, invest for the long term. Fourth, write down you strategy on paper because we're humans and we have this weird tendency to pull money out of investments and buy them, both at the worst times. Having a written game plan can help you stay on track. Good stuff and a good book for anyone wanting to develop a deeper understanding of investing and take charge of their retirement and financial future.

I really like the analogy on tennis.

Great information that anyone can implement to their personal financials. Book could be edited to half its length. Lots of basics covered.

Could be summed up in one sentence: buy index funds. Was expecting a lot more. Probably more innovative and exciting when it first came out.

A few good points but too much repetition.

Good advice

별 2개와 3개 사이에서 고민했으나 결국 별로라고 생각해서 2개로 결정했다. 책 구성이나 내용이 나쁘지는 않았다. 하지만 효율적 시장가설에 기반한 도서들이 다 그렇듯 모든 인간이 합리적인 결정을 한다는 기본 가정부터가 틀린 채로 시작하니 거기서 이야기는 발전이 없다. 그냥 인덱스 펀드 가입해서 장기보유하라는 것이다. 그 외에도 기존 다른 인덱스펀드 예찬론자들의 책에서 본 내용에서 크게 이 책만의 차별성도 없었다. 마지막으로 지은이가 세계 최대의 인덱스펀드 운용사 뱅가드의 이사다. 뭘 더 이야기하겠는가?

I thought it was decent. It had a bit too much jargon for the average Joe, and it seemed to reiterate itself a lot. I got the point of the book by about halfway thru. Invest in index funds and don’t use a money manager. Boom, that’s the entire book.