“The Four Pillars of Investing” by William Bernstein, first published in 2002, has endured changes in subsequent editions and offers timeless advice in the field of investing. The book covers four broad areas – theory, history, psychology, and business – providing a comprehensive guide for self-taught investors to understand the investment process and build a successful portfolio.
Key Points
- The book covers four pillars of investing: theory, history, psychology, and business.
- Pillar 1: Theory focuses on risk and return, asset allocation, and the importance of indexing for reliable returns.
- Pillar 2: History emphasizes learning from historical events to better prepare for future market cycles.
- Pillar 3: Psychology highlights the impact of behavioral traits on investment decisions and the importance of avoiding common pitfalls.
- Pillar 4: Business discusses the goal of investing to transfer wealth and cautions against relying too much on brokers, mutual funds, and media for investment decisions.
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