Overview
Main description
The classic guide to
constructing a solid portfolio—
with out a financial advisor!
“With relatively little effort, you
can design and assemble an
investment portfolio that, because
of its wide diversification and minimal
expenses, will prove superior to the
most professionally managed accounts.
Great intelligence and good luck
are not required.”
William Bernstein’s commonsense approach
to portfolio construction has served investors
well during the past turbulent decade—and
it’s what made The Four Pillars of Investing an
instant classic when it was first published nearly
a decade ago.
This down-to-earth book lays out in easy-to-understand
prose the four essential topics that
every investor must master: the relationship of
risk and reward, the history of the market, the
psychology of the investor and the market, and
the folly of taking financial advice from investment
salespeople.
Bernstein pulls back the curtain
to reveal what really goes on in today’s financial
industry as he outlines a simple program for
building wealth while controlling risk.
Straightforward in its presentation and generous in
its real-life examples, The Four Pillars of Investing
presents a no-nonsense discussion of:
- The art and science of mixing
different asset classes into an
effective blend
- The dangers of actively picking
stocks, as opposed to investing
in the whole market
- Behavioral finance and how
state of mind can adversely
affect decision making
- Reasons the mutual fund and
brokerage industries, rather than
your partners, are often your
most direct competitors
- Strategies for managing all of your
assets—savings, 401(k)s, home
equity—as one portfolio
Investing is not a destination. It is a journey, and
along the way are stockbrokers, journalists, and
mutual fund companies whose interests are diametrically
opposed to yours.
More relevant today than ever, The Four Pillars of
Investing shows you how to determine your own
financial direction and assemble an investment
program with the sole goal of building long-term
wealth for you and your family.
Table of contents
Preface; Introduction; Pillar One: The Theory of Investing; Chapter 1. No Guts, No Glory; Chapter 2. Measuring the Beast; Chapter 3. The Market is Smarter Than you Are; Chapter 4. The Perfect Portfolio; Pillar Two: The History of Investing; Chapter 5. Tops; Chapter 6. Bottoms; Pillar Three: The Psychology of Investing; Chapter 7. Misbehavior; Chapter 8. Behavioral Therapy; Pillar Four: The Business of Investing; Chapter 9. Your Broker is Not Your Buddy; Chapter 10. Neither is Your Mutual Fund; Chapter 11. Oliver Stone meets Wall Street: Investment Strategy; Chapter 12. Will you Have Enough?; Chapter 13. Defining Your Mix; Chapter 14. Getting Starts, Keeping it Going; Chapter 15. A Final Word
Author comments
William J. Bernstein, Ph.D., M.D., is a neurologist
and the cofounder of the investment management
firm Efficient Frontier Advisors. He is the
author of three finance books—The Intelligent
Asset Allocator, The Four Pillars of Investing, and
The Investor’s Manifesto—and two volumes of
economic history, The Birth of Plenty and A Splendid
Exchange. Bernstein is currently working on
a history book exploring the effects of access to
technology on human relations and politics.
Back cover copy
Since its initial publication, The Four Pillars of Investing has become a staple
for the independent-minded investor looking to make better-informed
investment decisions. Written by noted financial expert and neurologist
William Bernstein, this time-honored investing guide provides the knowledge
and tools for achieving long-term profitability.
Bernstein bridges the four fundamental topics successful investors use to generate
exceptional profits on a consistent basis:
- The Theory of Investing: “Do not expect high returns
without risks.”
- The History of Investing: “About once every generation,
the markets go barking mad. If you are unprepared,
you are sure to fail.”
- The Psychology of Investing: “Identify the era’s
conventional wisdom and assume that it is wrong.
More often than not, it is.”
- The Business of Investing: “The stockbroker services
his clients in the same way that Bonnie and Clyde
serviced banks.”
From the essential soundness of classic portfolio theory through the inherent wisdom
of investing in multiple asset classes, The Four Pillars of Investing provides
a distinctive blend of market history, investing theory, and behavioral finance to
help you become a successful, self-sufficient investor.
