The World's Best Book Summaries
What kind of company is Berkshire Hathaway? What is Berkshire Hathaway’s business philosophy? Berkshire Hathaway is a multinational holding company run by Warren Buffett. Buffett takes the time to explain the reasoning and philosophies behind everything he does as Berkshire’s CEO so that his shareholders can fully understand the company that they own. Keep reading to learn about Berkshire Hathaway’s business philosophy.
Should you invest in bonds? How do bonds compare to stocks in terms of return on investment? Historically, bonds have generated significantly lower returns than equity investments, or stocks: Annual returns on bonds have been 5.3% since 1900, while annual returns on stocks have been 9.5%. Despite that, the founder of the Vanguard Group Jack Bogle argues that bonds do belong in your portfolio. Here’s why you should invest in bonds, according to Bogle.
What is Warren Buffett’s approach to investing? What are the key pieces of Warren Buffett’s investment advice investors should take on board? Warren Buffett’s investment approach goes against the grain of many financial professionals’. Buffett himself points out where his views and those of other investors disagree. Three specific points of contention are Efficient Market Theory, diversified portfolios, and the supposed value of financial advisers. Keep reading to learn about the underpinnings of Warren Buffett’s approach to investing and how it differs from conventional practices.
Should you invest in mutual funds? Can actively managed mutual funds beat index funds? Index funds have consistently outperformed the majority of mutual funds since 1970. However, advocates of mutual funds argue that it only shows index funds are better than the average mutual fund. Here’s why index funds will always outperform mutual funds in the long run, according to Jack Bogle.
What assets should you never invest your money in, according to Warren Buffett? Why are these investments dangerous? Warren Buffett prefers equities over other forms of investment. He cautions against bad investments such as unproductive assets, junk bonds, and financial derivatives. Keep reading to learn why you should steer clear of these investments, according to Buffett.
Why invest in index funds over mutual funds? Could mutual funds beat the market in the long run? Only a tiny fraction of actively managed mutual funds will outperform index funds in the long run. This is because financial assets tend to converge to the average price over time—a statistical tendency called “reversion to the mean.” Here’s what reversion to the mean means for mutual fund investors.
Do you know how much money you’re actually spending? Or does your end-of-the-month bank balance come as a surprise? Why is it important to budget your expenses? Many people don’t budget their expenses: They just spend whatever is left after all their essential bills (e.g. rent and utilities) have been paid off. This is because creating a budgeting strategy that works for you is time-consuming, work-intensive, and complicated. Here are several budgeting strategies so you can either choose one that works for you or use them as an inspiration to create your own.
What’s the difference between mutual funds and index funds? Which gives a higher return on investment? According to John Bogle, the author of The Little Book of Common Sense Investing, mutual funds generate significantly lower ROI than index funds. Furthermore, the gap between mutual funds’ ROI and index funds’ ROI is set to increase in the future. Here’s why mutual funds’ ROI is going down, according to Bogle.
Why does Warren Buffett criticize the Wall Street approach? What are some ways in which Wall Street investment firms mishandle investors’ money? According to Warren Buffett, Wall Street’s business-as-usual practices highlight many areas in which most investment companies don’t serve the interests of the people whose money they steward. Specifically, Buffett highlights the failings of CEO culture, shady accounting, overpriced acquisitions, and the systemic dangers of financial derivatives. Keep reading to learn about Warren Buffett’s criticisms of Wall Street’s practices.
What is the difference between bond ETFs vs. bond mutual funds? Which delivers a higher return on investment? Bond mutual funds are actively managed funds where investors’ capital is distributed among select securities. In contrast, bond ETFs purchase securities that reflect certain bond indices. According to John Bogle, the author of The Little Book of Common Sense Investing, bond index funds deliver better returns than bond mutual funds. Here’s why bond ETFs are more profitable than bond mutual funds, according to Bogle.