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All the things that make us human make us terrible investors and you have to understand what they are and how to avoid them.

William J. Bernstein

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William J. Bernstein
Age: 76
Born: 1948
Born: January 1
Author
Chemist
Economist
Neurologist
Writer
Avoid
Terrible
Understand
Human
Humans
Make
Things
Investors

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You have to understand what market history looks like. What market history tells you is that the very, very best investments are made when things look the worst.
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Bluntly put, there's no chance that your doctor, dentist, or attorney is a high-school dropout. Your stockbroker, however, just might be.
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Mutual fund manager performance does not persist and the return of stock picking is zero.
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Wall Street is littered with the bones of those who knew just what to do, but could not bring themselves to do it.
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The typical fund company services 401k plan participants in the same way that Baby Face Nelson serviced banks.
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A fast food job, for most people, should be an entry level position. If you see no path for advancement beyond that, it's time to take a real fast look at your human capital and learn a skill that will make you more money.
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The essence of effective portfolio construction is the use of a large number of poorly correlated assets.
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There are two kinds of investors, be they large or small: those who don't know where the market is headed and those who don't know what they don't know. Then again, there is a third type of investor: the investment professional, who indeed knows he doesn't know, but whose livelihood depends upon appearing to know.
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Investment success accrues not so much to the brilliant as to the disciplined.
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The reason that 'guru' is such a popular word is because 'charlatan' is so hard to spell.
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The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.
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When it comes to fund managers and market strategists, this year's hero usually turns into next year's zero.
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It's human nature to find patterns where there are none and to find skill where luck is a more likely explanation (particularly if you're the lucky manager).
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It's bad enough that you have to take market risk. Only a fool takes on the additional risk of doing yet more damage by failing to diversify properly with his or her nest egg. Avoid the problem-buy a well-run index fund and own the whole market.
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The key thing about any fund is to make sure its expenses are low. You know, if you look at the funds in your plan and you see that they're all charging 1.5 and 2 percent,you've gota bad plan.
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The deeper one delves, the worse things look for actively managed funds.
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Market risk is like taking a plunge into a cool pool ... a lot of people are finding out right now what their risk tolerance is.
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The definition of investment is the deferring ofpresent consumption for future consumption. So, you dohave to be willing to defer. And there are a couple of tricks that you can use to save money. One of them is simply to pay yourself first.
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99% of fund managers demonstrate no evidence of skill whatsoever.
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If your broker or investment advisor is not familiar with the concept of standard deviation of returns, get a new one.
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