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The Four Pillars of Investing: Lessons for Building a Winning Portfolio

4.17  ·  Rating Details ·  2,451 Ratings  ·  122 Reviews
The classic guide to constructing a solid portfolio without 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
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ebook, 336 pages
Published July 8th 2010 by McGraw-Hill Education (first published April 26th 2002)
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(showing 1-30)
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Chad Warner
Aug 03, 2013 Chad Warner rated it really liked it  ·  review of another edition
Recommends it for: Investors
Recommended to Chad by: Kurt Kamminga
Shelves: finance, non-fiction
An investment adviser and I were talking about the financial books we had read, and he highly recommended this book as the next on my list. I can see why! Instead of immediately offering advice on how to invest, Bernstein takes a step back and makes sure you understand market theory, the history of the markets, the role of psychology in choosing investments, and the very real impact of expenses and the media's influence.

The book contains statistics, tables, graphs, analogies, examples, and theo
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Krenzel
Jun 20, 2008 Krenzel rated it it was amazing  ·  review of another edition
Shelves: finance
In the introduction to his book, "The Four Pillars of Investing: Lessons for Building a Winning Portfolio," Dr. William Bernstein states that the "competent investor never stops learning." Yet, because the world of investing can be such a confusing place, it sometimes seems that the more you learn, the more confused you get. As a participant on the Bogleheads message board, I feel I am an educated investor but still I often get lost after reading all the different debates: Should I invest in tot ...more
Paul
Jul 05, 2012 Paul rated it really liked it  ·  review of another edition
Bernstein argues that the successful investor must understand four essential content areas: the theory, history, psychology, and business of investing. Practically speaking, he argues that the best portfolios build on that understanding will be based on indexed mutual funds in several key asset classes.

Bernstein’s theoretical understanding of the market is complex, and any short review will not do it justice. It is fair to say, however, that he argues that the market is much smarter and more eff
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Daria
Feb 07, 2016 Daria rated it it was amazing  ·  review of another edition
This book exceeded my expectations. If Nassim Taleb were to write a book on investment advice early in his career that's probably what it would look like. The book covered some financial theory and history as well as offered very practical advice.
Wells Hamilton
Apr 10, 2010 Wells Hamilton rated it really liked it  ·  review of another edition
After years of studying technical and fundamental analysis, I can finally rest. Dr. Bernstein William J. Bernstein, a buy-and-hold, dollar cost averaging, index investing, portfolio rebalancer has made me a believer. I would have created a synopsis of the book for quick reviews down the road, but Bernstein conveniently included one at the end of each chapter, and one in the last chapter covering the whole book. The book is well-written, intelligent, and extraordinarily practical.
Kurt
Sep 25, 2015 Kurt rated it it was amazing  ·  review of another edition
A very good book I'd recommend to anyone interested in investing. It covers all the fundamentals one should know to try to avoid making big mistakes. Though I do disagree with his assumption that the market is rational in that risk and return will always be proportionally related.
Fraser
Jan 31, 2016 Fraser rated it it was amazing  ·  review of another edition
In short, Bernstein advocates wide diversification through a portfolio of passively managed index funds in different asset classes, and buy-and-hold for the long term

Pillar 1: Investment Theory
• High returns requires high risk.
• The market is efficient. Own it all by indexing.
• You can't time the market or pick winning stocks, so asset allocation is the only factor you can control, hence index the whole market.

Pillar 2: Investment History
The more history you know, the better prepared you'll be
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Milan
This book started out well with the introduction and the history of the financial markets. One chapter of the book describe how the various financial intermediaries - brokers, fund houses and investment banks - all work to profit from the investors. It also shows that the basic role of financial press is marketing financial products and not providing information. William Bernstein correctly shows that the small investor always comes last in the hierarchy of the financial world.

As the book moves
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Ambassador
May 05, 2015 Ambassador marked it as to-read  ·  review of another edition

Sound, sensible advice from a hero to frustrated investors everywhere

William Bernstein's The Four Pillars of Investing gives investors the tools they need to construct top-returning portfolios--without the help of a financial adviser. In a relaxed, nonthreatening style, Dr. Bernstein provides a distinctive blend of market history, investing theory, and behavioral finance, one designed to help every investor become more self-sufficient and make better-informed investment decisions. The 4 Pillar

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Catlin Bettridge
Through the numerous anecdotes provided by financial market history such as the Dutch Tulip Bubble of the 1600s and the Great Depression of the 1930s, this book provides a broad overview and introductory education in finance and investing. This book is somewhat technical and will be especially appealing to the reader who enjoys mathematical and scientific explanations of financial concepts. More importantly, this book imparts some extremely important lessons onto the reader, such as; markets are ...more
Zahwil
Apr 17, 2015 Zahwil rated it it was amazing  ·  review of another edition
I've read a few books about investing, but this is 'hands down' the best I've encountered. There's a lot of books out there which slam fund managers, stock brokers and their ilk, and recommend a passive approach with index funds. Unlike that 'old news', this book goes further by explaining how to value an asset, how to construct a portfolio, and how to think about your retirement 'nest egg'.

Bernstein is a great writer and I will definitely be checking out his other books. He says early on that
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Cindy
Aug 15, 2014 Cindy rated it it was amazing  ·  review of another edition
Shelves: non-fiction
The four pillars: Theory of Investing (returns are directly linked to risk), the History of Investing (understand past performance to build a portfolio, not to chase returns), the Psychology of Investing (stay the course!), and the Business of Investing (long-term, low-cost index funds will statistically beat any actively managed plan).

Take this book in small doses so you can ruminate on the concepts. I'm a huge fan of statistics, data, and the wisdom that comes from thoughtfully analyzing these
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Christopher Durand
William Bernstein does an excellent job of not only putting together a solid investing strategy. He doesn't hesitate to throw in numerous graphs and the occasional formula, but it is nothing the average person can't understand with careful reading. My favorite part about this book is that he takes the time to discuss implementing the strategy. He acknowledges that a person's financial situation may be less than ideal and works to provide numerous scenarios to overcome the challenges most investo ...more
Mark
Jan 26, 2009 Mark rated it it was amazing  ·  review of another edition
Shelves: money
Re-reading this in light of the money meltdown.

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One of the best books about investing I've read. By no means the first one you should read, but once you've got some of the basics under control, this helps takes it to a very sensible level. Asset allocation and the history of booms and busts are key here.

Though I just finished it a couple of weeks ago, I'd like to start re-reading it again soon. Very readable and interesting, though I can do without ever hearing about the tulip bulb bubble y
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KennyO
Jul 24, 2015 KennyO rated it liked it  ·  review of another edition
Shelves: finance-money
A really well written treatise on the basics of investing for those who didn't major in finance in college and don't want to wallow in stock analysis. The Four Pillars are: The Theory of Investing, which isn't rigorously theoretical; The History of Investing, knowing the lessons of history helps you avoid its errors; The Psychology of Investing, again not terribly psychological but it exposes the most invidious investing traps; The Business of Investing, the first chapter here is titled "Your Br ...more
Scott Diamond
May 09, 2016 Scott Diamond rated it it was amazing  ·  review of another edition
Shelves: investing
I listened to the audio book and I was expecting a serious financial tome but this book was delightful. The author covers some common topics in investing but does it in a humorous manner. He also offers some unique advice regarding performance of the stock market relative to bonds and REITs. I haven't studied REITs in depth but it appears that the author's advice provided in 2002 has held up very well up to 2016 and beyond.
Noah
Jan 20, 2016 Noah rated it really liked it  ·  review of another edition
Bernstein provides excellent insight into the history of the financial markets and the psychology of investing. The guidance on setting up a portfolio is backed up by thorough explanations. He explains how to diversify and how to get started from nothing. He also teaches his to use value averaging as a mechanism to add to your investment portfolio and rebalance at the same time. Excellent financial advice. Must read!
Adam
Feb 21, 2016 Adam rated it it was amazing  ·  review of another edition
This book is a must read for anyone that will ever do investing. If you learn some of the basics about how and why you should invest then you can save quite a bit of money in the process. This book is practical and detailed and specific without being too much in the weeds of details. I loved this book. Wish there was a higher star rating I could've given it.
Cass
Feb 23, 2015 Cass rated it it was amazing  ·  review of another edition
One of the best investment books I've ever read. It did more to bring me peace of mind and security in the fact that index fund investing is the only way to go. It has been a spring board to other investment reading. I'll not pay someone to manage my assets which means I need to learn how to manage them myself. With tools like this, I'm move forward quite competently.
Guy Simard
Mar 01, 2016 Guy Simard rated it it was amazing  ·  review of another edition
What a fantastic book about investments and investment strategy. This is not a book for beginners but if you are looking for substance regarding investment strategy, this is an excellent book to read. Bernstein goes way back (Centuries!) to look at investments throughout time, not only the last 50 years. This gives you a good perspective regarding markets.

Highly recommended.
Eric
Dec 05, 2015 Eric rated it it was amazing  ·  review of another edition
This is one of THE best books I have ever read on Investing. Following the more general introduction to Tony Robbins: Money Master the Game, I find this book goes even deeper and re-emphasizes how one should approach investing. Great book.
Angel **Book Junkie**
I suck at investments. (and I work for a bank)
I honestly don't feel like I know any more coming out of this book then I did going in. I think I am going to pick up Investing for Dummies I might learn a little more.
Alexis
Aug 24, 2015 Alexis rated it it was amazing  ·  review of another edition
Recommended to Alexis by: Tim Newsome
I was particularly drawn to the history and psychology sections. And although the theory part was really boring for me, it was necessary with which to understand the rest of the book. I definitely think I'll refer back to this book from time to time.
Katharine Rudzitis
While this book contains plenty of useful and important advice, my one caveat is that the recommendations aren't aggressive enough for 20-somethings.
Daniel Oon
May 30, 2015 Daniel Oon rated it it was amazing  ·  review of another edition
I have read tons of books that are similar in type and technicals however this read is just amazing. Put it this way, this is the book that I will get my family to read.
Bernardo Muñoz
Mar 31, 2015 Bernardo Muñoz rated it liked it  ·  review of another edition
Shelves: 2015
Buen libro al principio, sobre todo los 2 primeros pilares, los últimos capítulos ya me parecía que me querían vender algo. Le doy un 6.
Adrian Baudy
Mar 15, 2015 Adrian Baudy rated it it was amazing  ·  review of another edition
One of the best investment books I've read to date. One of the few books I think everyone should read at least once.
Alana
Jan 02, 2015 Alana rated it it was amazing  ·  review of another edition
Great book for those quasi-ignorant in the field of finance. The book accomplished what it set out to do with lots of great examples and anecdotes. Highly recommend.
Emily
Sep 07, 2015 Emily rated it liked it  ·  review of another edition
A bit above my head. Also, graphs provided not great on a kindle. Consistent message about use of index funds and diversifying portfolio.
Loren
Aug 29, 2014 Loren rated it it was amazing  ·  review of another edition
Excellent book if a little long.
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William J. Bernstein is an American financial theorist and neurologist. His research is in the field of modern portfolio theory and he has published books for individual investors who wish to manage their own equity portfolios. He lives in Portland, Oregon.

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“Only an income-producing possession, such as a stock, bond, or working piece of real estate is a true investment.” 0 likes
“But if you can understand the chapter’s central point—that the value of a stock or a bond is simply the present value of its future income stream—then you will have a better grasp of the investment process than most professionals. As” 0 likes
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