The Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between Hardcover – November 2, 2009
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—Scott Burns, Syndicated Columnist and Principal of Assetbuilder.com
From the Inside Flap
While the meltdown of 2008–2009 has compounded the complexity of the investment landscape, timeless investment principles can help you navigate even the toughest investment terrain. That's why bestselling author William Bernstein—a grassroots hero to independent investors—has written The Investor's Manifesto.
Approaching the problems of investing and saving from the perspective of someone who has had to figure it out for himself, Bernstein knows firsthand how difficult these endeavors can be—especially for those with little professional experience in this arena. Now, with the current market maelstrom as a backdrop, he skillfully describes what it takes to plan for a lifetime of investing, discussing stocks and bonds as well as the relationship between risk and return. Written in a straightforward and accessible style, The Investor's Manifesto:
Explores the theoretical basis of investing and designing portfolios, drawn in large part from financial history
Offers insights on dealing with the emotions and attitudes that routinely cripple investors
Discusses how to deal with the investment industry when executing strategies designed for anything from saving for retirement to putting a child through college
Addresses ways in which individual investors can construct diversified portfolios that can blunt potentially damaging market forces
Covers the concept of Pascal's Wager—which will enable you to identify and avoid worst-case investing scenarios
If there were ever a time to take control of your financial future, it is now. Potentially generous returns are available to the brave, the disciplined, and the liquid. If you follow the advice found here and keep your head while others lose theirs, then you will have a fighting chance of avoiding the financial pitfalls in front of you and profiting over the long-term.
- Publisher : Wiley; 1st edition (November 2, 2009)
- Language : English
- Hardcover : 224 pages
- ISBN-10 : 0470505141
- ISBN-13 : 978-0470505144
- Item Weight : 12.5 ounces
- Dimensions : 1.8 x 0.9 x 3.4 inches
- Best Sellers Rank: #273,107 in Books (See Top 100 in Books)
- Customer Reviews:
Top reviews from the United States
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What makes does book very unique IMO is an amazing big picture coverage of 4 key knowledge areas that must be adhered to for very long term investing. Coverage of these areas protects from many pitfalls that most investors eventually fall prey to and a practical solution in the end for anyone to follow. This book provides a multi-century perspective i.e a long term view of investing that most of us badly lack or forget in our day to day investing. The book does a great job of explaining asset classes from first principles, reason for getting returns in the first place, risk premium etc. And the chapter on investor psychology was simply amazing - I learned a lot of stuff from that short chapter. For example, the ratio of good to bad market days is very close to 50/50, but ratio of good to bad years is very high! Being short sighted and reactive to the day to day movements can influence investors in making very irrational decisions. Personally I found this chapter very enlightening towards my own investing decisions.
I won't say this book is complete but I would say knowledge in this book is essential to master if you are to ever hope for a long term portfolio that you can be happy about trusting for bulk of your savings.
I took one star off because of a big weakness in one of the most important topic this book covers: asset allocation. Mr. Bernstein does an amazing job explaining the benefits of diversification vs. active picking and stock concentration. The book also starts great by introducing the concept of risk premium and even talks about inflation adjusted returns. It also sharply focuses on how one must be ready to risk or lose some of the capital in the short term to get gains in the long term. But it never ties them together into a coherent concept by altogether skipping the crucial concept of "risk-adjusted returns". I feel the book skips an extremely important cornerstone of portfolio construction. This can make a difference of night and day over the long run of how much sleep you lose over your diversified portfolio and your overall gains, crash scenario + average losses in the long run.
The actual allocation ground rules for your money into stocks and bonds is very hand wavy, sticking the customary way of 60% equity / 40% bonds or other functions of one's age. This is some ways can be a dis-service because portfolio construction has come a long way than this "simple to teach" yet very risky allocation. Even a 60/40 portfolio is not really balanced since in terms of risk (or volatility) it is very heavily weighed towards stocks i.e. probability of losing money (80-90% of your losses in such a portfolio may come from stocks). Another way of saying this is that it still has low risk-adjusted returns (ratio of return/risk). One can greatly improve the risk of the portfolio by even simple weighing techniques that take into account some measure of "risk" and/or correlation of different assets. This is the essence of diversification and enhancing the long term risk-adjusted returns. Perhaps the classic approach is simple to teach and follow for a wide range of audience, but if one is talking about one's life's savings, I feel an extra or half a chapter was warranted to make this book really complete in its recommendations. Maybe the author does not feel there is any other allocation technique fundamentally superior to the "classic" age based allocations, but it would be nice to know a sound justification.
Overall, despite this, very highly recommended for every beginner or intermediate investor!
Top reviews from other countries
Have finished the book. The first few chapters are a bit theoretical and historical, but the main sections are more readable and relevant to personal investing. The main problem with the book is that the penultimate chapter about 'Building a portfolio' is for AMERICAN investors only, it does not take account of UK pensions or State provision.
If you are new to investing there is some good advice, the basic messages are: invest in passive/low cost funds, have some diversification in your portfolio and be honest about your 'rsik tolerance'
If you were only to read one book on investment, this is a very strong candidate for being that book.
If you are looking for get-rich-quick investment secrets, this is not the place. If you are looking for sober, intelligent and humble insights, I cannot recommend it strongly enough.
Il libro contiene anche alcuni specifici riferimenti a strumenti propri del mercato USA, però nel complesso i concetti sono assolutamente generali e ben spiegati.