Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition

Afterword

We have concluded our commonsense journey through the world of investment strategy, investment choices, and investment performance in establishing a simple, sensible, and effective fund portfolio. Following the investment principles set forth in these pages, I have no doubt, will make you a more successful long-term investor. Similarly, I have no doubt that a prompt return of the mutual fund industry to the traditional principles of prudent, disciplined portfolio management will make mutual funds far more productive investments. This change can best be facilitated under a structure that focuses on the primacy of the interests, not of fund managers, but of fund shareholders—the individual human beings to whom this industry is responsible.

Even as I remind you, for a final time, of the importance of common sense in establishing an investment program, and in industry governance as well, so too I remind you of the importance of "Common Sense" as my inspiration for this book's title. There is more than a passing similarity between the injustices suffered by the American colonies, articulated so powerfully by Thomas Paine, and the insufficient investment returns suffered by mutual fund shareholders. In the context of a mutual fund's relationship to its shareholders, some of Paine's words in "Common Sense" appear almost eerily prescient:

Paine on the Logic of Representative Government: "... As a colony increases the public concerns will increase likewise, and the distance at which ...