William Bernstein has several good reads, including the one I’ve just finished The Investor’s Manifesto, Preparing for Prosperity, Armageddon and Everything in Between. (yes, I was lured by the title)
For those that haven’t heard of William Bernstein, his status is legendary in financial circles. There’s a couple of things that I really like about him –
He even tells a few gags.
Below I’ve shared a few “Bernstein’isms”, valuable reminders to us all:
Markets can and will go mad
The best defence against madness is to understand the history of financial markets. Be comfortable that it’s all happened before.
Markets for individual shares are brutally efficient
Never assume you will make money investing in a single share. Always assume you are trading against someone smarter, more informed and working harder than you.
Portfolio theory is king
Asset allocation is the key to achieving returns. You will never know when a market will do well or badly in advance. So buy them all and use diversification to your advantage
You are your own worst enemy
Be sensible and frugal
Live modestly. Save as much as possible, for as long as possible
Teach your children well
Teach them how to spend, save and invest prudently
Pascal's Wager (not sure, more on Pascal's Wager here)
Risk and return are intimately linked
You don’t get high returns without bearing painful losses along the way. You cannot achieve perfect safety without accepting low returns
Bernnstein presents a brilliant case for keeping it simple: keep diversified, rebalance, start now, keep expenses low.
He also says that to start with an honest assessment of where you are at is essential. See our offer below.
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