Book Review: The Four Pillars of Investing by William Bernstein

Four Pillars Should Be Required Reading for Every Investor

Book Title: The Four Pillars of Investing
Author: William Bernstein

Readability: Not an easy read, but not too hard either, and absolutely worth the time.
Technicality: Provides analogies and stories as well as technical information, using tables and graphs.
Provides Practical, How To Knowledge On: The right way to determine expected rates of returns from investments, the mistakes investors make, and the misconceptions about the investment industry. Quotes: Read quotes from Four Pillars Of Investing.

Summary: The Four Pillars of Investing details the following four areas you must study to have investment success:

1. The theory of investing which discusses the academic research and data that is available; how to use it, and how not to use it.
2. The history of investing which covers market bubbles and market depressions.
3. The psychology of investing, as in why people make illogical, erroneous decisions over and over.
4. And the business of investing, which tells you how Wall St works so you know what type of financial people to work with and which ones to stay away from.

William Bernstein uses great analogies, humor, practical common sensec and rock solid academic data to help you realize that anyone who says they can consistently beat market returns is lying. Four Pillars is a must read for any investor who plans on building a portfolio of financial assets (stocks, bonds, and funds).

Downside: If you’re looking for a get rich quick in the market book than you won’t like The Four Pillars of Investing. It’s filled with straight talk backed by academic data. For non-academic types, the numbers, data, and math might be daunting.