Chapter 2 asks a question most investors skip: where do returns actually come from? Bogle’s answer uses Occam’s Razor. The simplest explanation is usually correct. For stocks and bonds, that means three components. Not twenty.
Chapter 1 of Common Sense on Mutual Funds opens with a movie reference and ends with math that should change how you invest. Bogle uses Chance the gardener from Being There to explain something most investors forget: economies and markets have seasons.
Chapter 13 of A Random Walk Down Wall Street is where Malkiel teaches you to be a financial bookie. Not the kind who takes bets on horse races. The kind who can look at the market and make a reasonable guess about what stocks and bonds will return over the long run. You still won’t be able to predict what the market does next month. But you’ll have a framework for setting realistic expectations.