Best Selling Books by William J. Bernstein

A timeless approach to investing wisely over an investment lifetime With the current market maelstrom as a background, this timely guide describes just how to plan a lifetime of investing, in good times and bad, discussing stocks and bonds as well as the relationship between risk and return. Filled with in-depth insights and practical advice, The Investor''s Manifesto will help you understand the nuts and bolts of executing a lifetime investment plan, including: how to survive dealing with the investment industry, the practical meaning of market efficiency, how much to save, how to maintain discipline in the face of panics and manias, and what vehicles to use to achieve financial security and freedom. Written by bestselling author William J. Bernstein, well known for his insights on how individual investors can manage their personal wealth and retirement funds wisely Examines how the financial landscape has radically altered in the past two years, and what investors should do about it Contains practical insights that the everyday investor can understand Focuses on the concept of Pascal''s Wager-identifying and avoiding worst-case scenarios, and planning investment decisions on that basis With The Investor''s Manifesto as your guide, you''ll quickly discover the timeless investment approaches that can put you in a better position to prosper over time.

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 Pillars of Investing explains how any investor can build a solid foundation for investing by focusing on four essential lessons, each building upon the other. Containing all of the tools needed to achieve investing success, without the help of a financial advisor, it presents: Practical investing advice based on fascinating history lessons from the market Exercises to determine risk tolerance as an investor An easy-to-understand explanation of risk and reward in the capital markets

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 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.

The classic guide to constructing a solid portfolio―without a financial advisor! First published two decades ago, The Four Pillars of Investing has been the go-to resource for an entire generation of investors. This updated edition of the investing classic provides the foundational knowledge you need to avoid the most common pitfalls and build a portfolio in today’s roller-coaster world of investing. Retired neurologist and master investor William J. Bernstein has seen it all throughout his career. Buying investments with borrowed money. Chasing past performance. Overestimating one’s own risk tolerance. Listening to cable news. These are just a few of the many mistakes he has witnessed smart, serious investors make, to the peril of their portfolios. Add to these behavioral errors such economic factors as deflation, sudden stock declines, soaring inflation, and the like—and investing can seem like something to be avoided at all costs. But with the right discipline and knowledge, you can build and manage an impressive portfolio. It all comes down to understanding four key pillars: Theory: Risk and return go hand in hand—you can’t make money without risk History: Understand past markets to understand today’s markets Psychology: Avoid the most common behavioral mistakes that tank portfolios Business: The cost of investment services can be high—unreasonably high After taking you on a deep dive into each of these topics, Bernstein walks you through the process of designing and maintaining a powerful portfolio. Times have changed. Economies have changed. And markets are ever-changing. But sound investing principles haven’t changed. Use The Four Pillars of Investing to stay a step ahead of your investing peers and build a portfolio to be proud of.

Time-Tested Techniques - Safe, Simple, and Proven Effective - for Building Your Own Investment Portfolio. "As its title suggest, Bill Bernstein''s fine book honors the sensible principles of Benjamin Graham in the Intelligent Investor Bernstein''s concepts are sound, his writing crystal clear, and his exposition orderly. Any reader who takes the time and effort to understand his approach to the crucial subject of asset allocation will surely be rewarded with enhanced long-term returns." - John C. Bogle, Founder and former Chief Executive Officer, The Vanguard Group President, Bogle Financial Markets Research Center Author, common Sense on Mutual Funds. "Bernstein has become a guru to a peculiarly ''90s group: well-educated, Internet-powered people intent on investing well - and with minimal ''help'' from professional Wall Street." - Robert Barker, Columnist, BusinessWeek. "I go home and tell my wife sometimes, ''I wonder if [Bernstein] doesn''t know more than me.'' It''s humbling." - John Rekenthaler, Research Chief, Morningstar Inc. William Bernstein is an unlikely financial hero. A practicing neurologist, he used his self-taught investment knowledge and research to build one of today''s most respected investor''s websites. Now, let his plain-spoken The Intelligent Asset Allocator show you how to use the time-honored techniques of asset allocation to build your own pathway to financial security - one that is easy-to-understand, easier-to-apply, and supported by 75 years of solid history and wealth-building results.

A Financial Times and Economist Best Book of the Year exploring world trade from Mesopotamia in 3,000 BC to modern globalization. How did trade evolve to the point where we don’t think twice about biting into an apple from the other side of the world? In A Splendid Exchange, William J. Bernstein, bestselling author of The Birth of Plenty, traces the story of global commerce from its prehistoric origins to the myriad controversies surrounding it today. Journey from ancient sailing ships carrying silk from China to Rome in the second century to the rise and fall of the Portuguese monopoly on spices in the sixteenth; from the American trade battles of the early twentieth century to the modern era of televisions from Taiwan, lettuce from Mexico, and T-shirts from China. Bernstein conveys trade and globalization not in political terms, but rather as an ever-evolving historical constant, like war or religion, that will continue to foster the growth of intellectual capital, shrink the world, and propel the trajectory of the human species. “[An] entertaining and greatly enlightening book.” —The New York Times “A work of which Adam Smith and Max Weber would have approved.” —Foreign Affairs “[Weaves] skillfully between rollicking adventures and scholarship.” —Pietra Rivoli, author of The Travels of a T-Shirt in the Global Economy

This “disturbing yet fascinating” exploration of mass mania through the ages explains the biological and psychological roots of irrationality (Kirkus Reviews). From time immemorial, contagious narratives have spread through susceptible groups—with enormous, often disastrous, consequences. Inspired by Charles Mackay’s nineteenth-century classic Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, neurologist and author William Bernstein examines mass delusion through the lens of current scientific research in The Delusions of Crowds. Bernstein tells the stories of dramatic religious and financial mania in western society over the last five hundred years—from the Anabaptist Madness of the 1530s to the dangerous End-Times beliefs that pervade today’s polarized America; and from the South Sea Bubble to the Enron scandal and dot com bubbles. Through Bernstein’s supple prose, the participants are as colorful as their “desire to improve one’s well-being in this life or the next.” Bernstein’s chronicles reveal the huge cost and alarming implications of mass mania. He observes that if we can absorb the history and biology of this all-too-human phenomenon, we can recognize it more readily in our own time, and avoid its frequently dire impact.

“Compact and immensely readable . . . a tour de force. Prepare to be amazed.” John C. Bogle, Founder and Former CEO, The Vanguard Group Bernstein is widely respected as author of the bestseller, The Intelligent Asset Allocator Identifies and explains the four conditions necessary for human progress

This booklet takes portfolio design beyond the familiar "black box" mean-variance framework. Most importantly, the short-term volatility of financial assets, commonly measured as standard deviation, is a highly imperfect measure of the actual long-horizon perils faced by real-world investors subject to the vagaries of financial and military history. These risks have names--inflation, deflation, confiscation, and devastation--and any useful discussion of portfolio design of necessity incorporates their probabilities, consequences, and costs of mitigation ... This booklet contains ... with luck, a framework within income and all-equity portfolios. This booklet contains ... with luck, a framework within which to think more clearly about risk. Note: the entire Investing for Adults series is not for beginners.

William J. Bernstein promises to lay out an investment strategy that any seven year old could understand and will take just 15 minutes of work per year. He also promises it will beat 90% of finance professionals in the long run, but still make you a millionaire over time. Bernstein is addressing young Americans just embarking on their working careers. Bernstein advocates saving 15% of one''s salary starting no later than age 25 into tax-sheltered savings plans (IRA or 401(k) in the U.S., RRSPs or Registered Pension Plans in Canada), and divvying up the money into just three mutual funds: a U.S. total stock market index fund, an international stock market index fund and a U.S. total bond market index fund. For millennials, saving 15% of salary is the financial equivalent of dying, which is why Bernstein titles his document ''IF you can.''

Presents the current state of the global economy, and identifies the forces necessary for sustained growth-scientific rationalism, property rights, capital markets, and solid communications and transportation infrastructure.

A “riveting and thoroughly researched” history of language technology’s effect on society across millennia—from Sumerian syntax to social media hashtags (Phil Lapsley). Writing was born thousands of years ago in Mesopotamia. Spreading to Sumer, and then Egypt, this revolutionary tool allowed rulers to extend their control far and wide, giving rise to the world’s first empires. When Phoenician traders took their alphabet to Greece, literacy’s first boom led to the birth of drama and democracy. In Rome, it helped spell the downfall of the Republic. Later, medieval scriptoria and vernacular bibles gave rise to religious dissent, and with the combination of cheaper paper and Gutenberg’s printing press, the fuse of Reformation was lit. The Industrial Revolution brought the telegraph and the steam driven printing press, allowing information to move faster and wider than ever before through the invention of the newspaper. But along with radio and television, these new technologies were more easily exploited by the powerful, as seen in Germany, the Soviet Union, even Rwanda, where radio incited genocide. With the rise of carbon duplicates (Russian samizdat), photocopying (the Pentagon Papers), the internet, social media, and cell phones (the recent Arab Spring) more people have access to communications, making the world more connected than ever before. This “accessible, quite enjoyable, and highly informative read” will change the way you look at technology, history, and power (Booklist). “[Bernstein] enables us to see what remains the same, even as much has changed.” —Library Journal, “Editors’ Picks” “It brims with interesting ideas and astonishing connections.” —Phil Lapsley, author of Exploding the Phone: The Untold Story of the Teenagers and Outlaws Who Hacked Ma Bell “[Bernstein’s] narrative is succinct and extremely well sourced. . . . [He] reminds us of a number of technologies whose changed roles are less widely chronicled in conventional histories of the media.” —The Irish Times

Rational Expectations is a clean sheet of paper in the wonky world of quantitatively based asset allocation aimed at small investors. Continuing the theme of the Investing for Adults series, this full-length finance title is not for beginners, but rather assumes a fair degree of quantitative ability and finance knowledge. If you think you can time the market or pick stocks and mutual fund managers, or even if you think that you can formulate an optimally efficient mean-variance asset allocation with a black box, then learn some basic finance and come back in a few years. On the other hand, if you know your way around risk premiums and standard deviations and know who Irving Fisher and Benjamin Graham were, and if you want to sharpen your asset class skills, you''ve come to the right place.

Covers navigating the global investment landscape and provides a way of thinking about diversification.

"The Ages of the Investor: A Critical Look at Life-cycle Investing" is intended to be the first installment in the "Investing for Adults" series. Just as grown-ups do not believe in the Tooth Fairy, the Easter Bunny, or Santa Claus, "Investing adults" know that there is no such creature as the Stock-picking Fairy or the Market-timing Fairy. Further, there is no Risk Fairy who will write you cheap options that will protect your stock holdings against loss. Investing adults are familiar with Gene Fama, Zvi Bodie, Jack Bogle, and Burton Malkiel, and understand that a mean variance optimizer does not blend vegetables. In other words, this series is not for beginners. Future topics will, with luck, include the limits of market efficiency and diversification in increasingly non-segmented global markets.

Over the past four centuries, financial crises have occurred at semi-regular intervals of approximately once a decade. Their primary mechanism seems to be the increasingly elastic nature of credit in the modern financial system. Recent advances in neurophysiology and cognitive neuropsychology shed light on this phenomenon and provide hints about how such crises might be mitigated in the future.

The effective (geometric mean) return of a periodically rebalanced portfolio always exceeds the weighted sum of the component geometric means. Some approximate formulae for estimating this effective return are derived and tested. One special case of these formulae is shown to be particularly simple, and is used to provide easily computed estimates of the benefits of diversification and rebalancing. The results are also used to show how classical Mean-Variance Optimization may be modified to generate the Geometric Mean Frontier, the analog of the efficient frontier when the geometric mean is used as the measure of portfolio return.

Two important concepts played a key role in the bull market of the 1990s. Both represent fundamental flaws in logic. Both are demonstrably untrue. First, many investors believed that earnings could grow faster than the macroeconomy. In fact, earnings must grow slower than GDP because the growth of existing enterprises contributes only part of GDP growth; the role of entrepreneurial capitalism, the creation of new enterprises, is a key driver of GDP growth, and it does not contribute to the growth in earnings and dividends of existing enterprises. During the 20th century, growth in stock prices and dividends was 2 percent less than underlying macroeconomic growth. Second, many investors believed that stock buybacks would permit earnings to grow faster than GDP. The important metric is not the volume of buybacks, however, but net buybacks - stock buybacks less new share issuance, whether in existing enterprises or through IPOs. We demonstrate, using two methodologies, that during the 20th century, new share issuance in many nations almost always exceeded stock buybacks by an average of 2 percent or more a year.