The Four Pillars of Investing: Lessons for Building a Winning Portfolio
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 common...more
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The book contains statistics, tables, graphs, analogies, examples, and theo ...more
Investment as they is like a water in the river. It will continue to flow as long as there will be no blockage on its way. It can become big or become smaller but it always depend on what canal or tunnel it passes through. Or maybe it might goes to the sea or ocean perhaps. 😀😄😂
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 ...more
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 ...more
I always love the books that starts from the beginning of theory, from basics principles, deriving step by step the correct conclusions, and not by making you accept a lot of assumptions and “jumps of faith”. The author talks freely about his opinion of active managed funds.
This one and A Random Walk Down Wall Street are my favorites to introduce somebody to investin ...more
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 ...more
As the book moves ...more
The book is presented in two main parts. First, the four pillars from which the book title comes from, where the authors in a clear and friendly way introduces a basic theoretical approa ...more
It trashes the financial news that we, as traders or just regular joe's, receive on a daily basis. It details how our banks and brokers are not our friends and it teaches us how to invest properly. We will not find the next Microsoft, that's for sure, but we won't ruin our financial life by trying to do it. Also, we will not be hostages of the hefty fees charged by banks and financial brokers. ...more
P45 speculation vs. investment vs. purchase
P102 “most of the investment industry is engaged in non-productive work
P159 “The burnt customer certainly prefers to believe that he has been robbed rather than that he has been a fool on the advice of fools.”
P171 “one of the most deadly investment traits is the need for excitement”
P179 shopping list of maladaptive behaviors-- herd m ...more
Particularly enjoyed being taken to school on bonds and the value in one's portfolio.
If you intend to have any say in your future wealth, this is highly recommended. ...more
As the disadvantages of this book I would say that it is a little bit dense and out of date (in some aspects).
Everyone (from economy/finance "connoisseurs" to completely new to the matter) should read this book for having a good knowledge basis about e ...more
The four pillars are investing are: the theory, the history, the psychology, and the business of investing. Each "pillar" took about 2-4 chapters that were usually peppered with financial terms, mathematical formulae, bar charts, which required some active thinking. It felt like reading a very instructive textbook -- being both dry in tone, but concise in its explanations. The really valuable stuff is unfortunately at the end of these four pillars, which is where ...more
Here’s the thing, though: the basic principles are pretty easy, and mastering those basics will make you a competent investor. Start with John Bogle’s “Common Sense on Mutual Funds”. If you never read another book on investing, you will still be well-prepared to do such thi ...more
Bernstein is a great writer and I will definitely be checking out his other books. He says early on that ...more
It really feels more like four books in one:
- a great theoretical intro into investing theory (which is what usually most other books are focusing on);
- a captivating historical research of financial bubbles starting in early 1700's;
- an analysis of market's and individual human psychology and biases when it comes down to investing;
- a comprehensive and truthful review of modern business practices of brokerage fir ...more
Here are the four pillars to save you some time:
1. Theory (how to price, why you should index)
2. History (Did you know the interest rate in ancient rome was 4%? You should.)
3. Psychology (ignore your instincts and what people say at dinner parties)
4. Business (stock brokers and business press -- not your friends)
Mr. Bernstein trained as a physician, so he brings a scientific mindset that I c ...more
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 ...more