The Four Pillars of Investing Quotes

“The easiest way to get rich is to spend as little as possible.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“If you find yourself stimulated in any way by your portfolio performance, then you are probably doing something very wrong. A superior portfolio strategy should be intrinsically boring.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“Only an income-producing possession, such as a stock, bond, or working piece of real estate is a true investment.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“La mejor época posible para invertir es cuando el cielo amenaza tormenta, puesto que los inversores descontarán los ingresos futuros de las acciones a una tasa muy elevada.”
― William J. Bernstein, Los cuatro pilares de la inversión: Fundamentos para construir una cartera ganadora (Deusto)

“el valor de una acción o bono es simplemente el valor presente de su flujo de ingresos futuro–,”
― William J. Bernstein, Los cuatro pilares de la inversión: Fundamentos para construir una cartera ganadora (Deusto)

“As we’ll see, the 4% Roman rate of return is about the same as the aggregate return on capital (when stocks and bonds are considered together) in the U.S. in the twentieth century, and perhaps even a bit more than the aggregate return expected in the next century. (The 4% Roman rate was gold-based, so the return was a real, that is, after-inflation, return.) The”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“Personal finance, like most important aspects of life, is a never-ending quest. The competent investor never stops learning.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“the average stockbroker services his clients in the same way that Baby Face Nelson serviced banks.”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.” Sylvia Bloom had it, in spades.”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“Breaking the market into subclasses is at best expensive and distracting and, at worst, will expose you to unnecessary risk.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“Rebalancing forces you to buy low and sell high.”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“Rebalancing a typical stock/bond portfolio will decrease return in the long run, but will also keep periodic losses down to a level you can live with and allow your portfolio to survive.”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“The investor thus needs to be careful to execute all ETF trades as limit orders to avoid a suddenly widened”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“The experienced investor quickly learns not to optimize the past, since most market behavior is random and what worked yesterday rarely works tomorrow.”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“they’re all competing against each other, so on average they get the market return, minus their expenses—”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“if you invested in the top 10% of last year’s funds, you would match (but not exceed) the performance of an index fund with low expenses in the next year.”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“In the long run, there’s nothing wrong with not tilting toward any factors at all—that is, owning only total-market funds. These incur virtually no investment costs and are highly tax efficient.”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“All else being equal, companies that sell necessary staples that consumers need even when the economy’s tanked—food, medicines, bathroom tissue—will sell at higher prices than companies that make new automobiles and luxuries, and whose purchases can be deferred.”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“Tell yourself every day that the object of investing is not to maximize the odds of getting rich, but to minimize the odds of dying poor,”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“YouTube also contains a treasure trove of lectures by nearly all of finance’s leading lights, strewn throughout its vast wasteland of misinformation. Tread carefully. A few wrong clicks and you’ll wind up with a QAnon conspiracist or a crypto bro. Of the names I’ve mentioned in this book, I’d search for John Bogle, Eugene Fama, Kenneth French, Jonathan Clements, Zvi Bodie, William Sharpe, Burton Malkiel, Charles Ellis, and Jason Zweig. Worthwhile finance podcasts abound. Start with the Economist’s weekly “Money Talks” and NPR’s Planet Money, although most of the latter’s superb coverage revolves around economics and relatively little around investing. Rick Ferri’s Boglehead podcast interviews cover mainly passive investing. Another financial podcast I highly recommend is Barry Ritholtz’s Masters in Business from Bloomberg. Podcasts are a rapidly evolving area. Lest you wear your ears out, you’ll need discretion to curate the burgeoning amount of high-quality audio. Research mutual funds. All the fund companies discussed in this book have sophisticated websites from which basic fund facts, such as fees and expenses, can be obtained, as well as annual and semiannual reports that list and tabulate holdings. If you’re researching a large number of funds, this gets cumbersome. The best way is to visit Morningstar.com. Use the site’s search function to locate the main page for the fund you’re interested in and click the “Expense” and “Portfolio” tabs to find the fund expense ratio and detailed data on the fund holdings. Click the “Performance” tab to see the fund’s return over periods ranging from a single day up to 15 years, and the “Chart” tab to compare the returns of multiple funds over a given interval. ***”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“What about real estate? In general, it holds its real value and yields rental income, but owning property isn’t so much an investment as it is a job. If you like fixing toilets and dealing with drug-addled, gun-toting deadbeat tenants, be my guest.”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“Finance is not a hard science like physics or engineering; rather, it’s a social science. The difference is this: a bridge, electrical circuit, or aircraft will always respond in exactly the same way to a given set of circumstances, while the financial markets do not,”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“Albert Einstein has it that “Compound interest is the eighth wonder of the world. He who understands it, earns it.”
― William J. Bernstein, The Four Pillars of Investing, Second Edition: Lessons for Building a Winning Portfolio

“The analysts feel immense pressure to recommend the stocks of companies that their firm underwrites, or whose underwriting business they are seeking. Analysts are frequently threatened with discipline, or worse, for making unfavorable recommendations about such companies, and their recommendations are laced with euphemisms such as “outperform,” “accumulate,” or “hold.” Because it may anger a potential underwriting client, the word “sell” does not seem to be in their vocabulary.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“Great intelligence and good luck are not required. The essential characteristics of the successful investor are the discipline and stamina to, in the words of John Bogle, “stay the course.”
Investing is not a destination. It is an ongoing journey through its four continents—theory, history, psychology, and business.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“So when all your friends are investing in a certain area, when the business pages are full of stories about a particular company, and when “everybody knows” that something is a good deal, haul up the red flags. In short, identify current conventional wisdom so that you can ignore it.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“the most profitable thing we can learn from the history of booms and busts is that at times of great optimism, future returns are lowest; when things look bleakest, future returns are highest. Since risk and return are just different sides of the same coin, it cannot be any other way.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“it is the duty of shareholders to periodically suffer loss without complaint.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“The five major domestic asset classes you should use are: large market, small market, large value, small value, REITs.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“For example, the most consistent bit of irrational investment behavior is the commonplace observation that we are less likely to sell losers than winners. This is known in behavioral finance circles as “regret avoidance.” Holding onto a stock that has done poorly keeps alive the possibility that we will not have to confront the finality of our failure.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio