John Bogle – a Wall Street legend and founder of the Vanguard family of funds – exposes simple and wise precepts: take a long term view; diversify to lower risk; pay attention to costs; prefer passively managed funds (i.e. index funds) to actively managed funds.

In particular, he details the effects of costs (expense ratio, fees such as 12-b1, taxes). Essential concepts such as compounding and tax deferral are explained. A well covered topic is the reversion to the mean; no manager or asset class can stay on top of the game forever. Also explained is the important rule that past performance is no guarantee of future returns.

One of Bogle’s most famous quotes: “Investors have two enemies: expenses and emotions”.