The Investor's Manifesto Preparing for Prosperity, Armageddon, and Everything in Between

by Bernstein, William J.; Clements, Jonathan

• ISBN13: 9780470505144
• ISBN10: 0470505141
• Format: Hardcover
• Copyright: 2009-11-02
• Publisher: Wiley

Summary

A timeless approach to investing wisely over an investment lifetimeWith 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 basisWith 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.

Author Biography

William J. Bernstein, PhD, MD, is a bestselling author known as a grassroots hero to independent investors. Formerly a practicing neurologist, Bernstein approaches the problems of saving and investing as someone who had to figure it out for himself—from first principles up. He is the author of The Intelligent Asset Allocator and The Four Pillars of Investing—highly regarded, plain-spoken guides on how to build a diversified portfolio without the help of a financial advisor—the editor of the asset allocation journal Efficient Frontier, and the founder of the popular Web site efficientfrontier.com. He has also written two volumes of economic history, The Birth of Plenty and A Splendid Exchange, and is a coprincipal in Efficient Frontier Advisors.

Table of Contents

Foreword	p. ix
Preface	p. xiii
A Brief History of Financial Time	p. 1
In the Beginning	p. 2
Near-Death in Venice	p. 8
The Incredible Shrinking Risk Premium	p. 11
Summary	p. 12
The Nature of the Beast	p. 13
Of Ravens and Returns	p. 13
History versus Math	p. 13
Mr. Gordon's Curious Equation	p. 25
Math Detail: The Discounted Dividend Model	p. 29
Home Sweet Home?	p. 35
Adventures in Equity	p. 38
Math Detail: Risk	p. 43
Throwing Dice with God	p. 47
Gene Fama Looks for Angles and Finds None	p. 49
Sandbagged by a Superstar	p. 52
Jack Bogle Outfoxes the Suits	p. 56
It Is Better to Be Lucky Than Smart	p. 63
Bond Funds: A Flatter Playing Field	p. 64
Summary	p. 65
The Nature of the Portfolio	p. 69
Four Essential Preliminaries	p. 71
The Asset Allocation Two-Step	p. 74
Math Detail: Mean-Variance Analysis	p. 83
With Luck, Zigs, and Zags	p. 84
Chasing Rainbows	p. 88
Summary	p. 93
The Enemy in the Mirror	p. 95
Inner Demons	p. 97
Behaving Badly	p. 100
Bargain-Basement Psychotherapy	p. 116
Summary	p. 125
Muggers and Worse	p. 127
The World's Largest Bad Neighborhood	p. 128
The Fund Funhouse	p. 135
Summary	p. 142
Building Your Portfolio	p. 143
Financial Planning for a Lifetime: The Basics	p. 143
Saving for Retirement: Nuts and Bolts	p. 145
How to Save: Dollar Cost Averaging and Value Averaging	p. 152
Four Investors, Four Plans	p. 154
The Rebalancing Question	p. 166
Math Detail: Rebalancing, Momentum, and Mean Reversion	p. 169
Teach Your Children Well	p. 172
Summary	p. 174
The Name of the Game	p. 179
Investment Theory and History: The Short Course	p. 180
The Portfolio Theory of Everything	p. 181
We Have Met the Enemy, and He Is Us	p. 181
Heads I Win, Tails You Lose	p. 182
Fire When Ready	p. 182
The Books You Need...Aged Like Fine Wine	p. 185
Notes	p. 188
Acknowledgments	p. 193
About the Author	p. 195
Index	p. 196
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