Best 40 quotes of William J. Bernstein on MyQuotes

A decade ago, I really did believe that the average investor could do it himself. I was wrong. I've come to the sad conclusion that only a tiny minority, at most one percent, are capable of pulling it off. Heck, if Helen Young Hayes, Robert Sanborn, Julian Robertson, and the nation's largest pension funds can't get it right, what chance does John Q. Investor have?

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.

An index fund is a fund that simply invests in all of the stocks in a market. So, for example, an index fund might invest in every single stock or almost every single stock in the U.S. market, it might invest in every single stock abroad, or it might invest in all of the bonds that are out there. And you can make a perfectly fine investing portfolio that mixes equal parts of all three of those.

Bluntly put, there's no chance that your doctor, dentist, or attorney is a high-school dropout. Your stockbroker, however, just might be.

Do the math. Expect catastrophes. Whatever happens, stay the course.

For the taxable investor, indexing means never having to say you're sorry.

Investment success accrues not so much to the brilliant as to the disciplined.

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.

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).

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.

Mutual fund manager performance does not persist and the return of stock picking is zero.

No one in his right mind would walk into the cockpit of an airplane and try to fly it, or into an operating theater and open a belly. And yet they think nothing of managing their retirement assets. I've done all three, and I'm here to tell you that managing money is, in its most critical elements even more demanding than the first two.

The deeper one delves, the worse things look for actively managed funds.

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.

The essence of effective portfolio construction is the use of a large number of poorly correlated assets.

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.

There are two kinds of investors, be thay large or small: those who don't know where the market is headed, and those who don't know that they don't know.

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.

The reason that 'guru' is such a popular word is because 'charlatan' is so hard to spell.

The typical fund company services 401k plan participants in the same way that Baby Face Nelson serviced banks.

Wall Street is littered with the bones of those who knew just what to do, but could not bring themselves to do it.

When it comes to fund managers and market strategists, this year's hero usually turns into next year's zero.

While it is probably a poor idea to own actively managed funds in general, it is truly a terrible idea to own them in taxable accounts... taxes are a drag on performance of up to 4 percentage points each year... many index funds allow your capital gains to grow largely undisturbed until you sell... For the taxable investor, indexing means never having to say you're sorry.

You have to ask yourself, what are the things that matter to you most in your life? If you have to have a latte every day that'snice to have right now, but if you take that latte every day right now, you may wind up eating cat food when you are 70. And you have to decide which is worse.

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.

You have to understand your own psychology. You have to understand that human beings weren't really designed to invest. We have all these emotions that are appropriate responses if you're being chased by a tiger, but they're terrible responses if you've got a 30-year time horizon to think about investment or when you're trying to manage investment over 30 years.

Although the Anatolians and the people of the Indus Valley knew each other's products, it is not known whether or not they met each other face-to-face; rather, they would have been separated by an unknown number of middlemen.

Although the Muslim commercial web possessed many advanced features, including bills of exchange, sophisticated lending institutions, and futures markets, no Islamic state ever established the bedrock financial institution of the modern world: a national or central bank

As a general rule, the Chinese seldom ventured west of Sri Lanka, the Indians north of the Red Sea mouth, and the Italians south of Alexandria. It was left to the Greeks, who ranged freely from India to Italy, to carry the greatest share of the traffic.

Chinese sources suggest that Islam arrived in Canton in about 620, a full dozen years before the death of the Prophet.

Christians and Jews often taunted the Arabs about their polytheistic beliefs and their lack of an overarching creed and an afterlife. Consequently, a sense of religious inferiority arose among the desert dwellers, along with a pent-up desire for a comprehensive belief system of their own.

Dramatic conquests often lead to startling serendipities: the most momentous Muslim acquisition at Talas was not territory or silk, but a commodity at once prosaic and precious. Among the Chinese prisoners taken at Talas were papermakers, who soon spread their wondrous craft into the Islamic world, and then to Europe, changing forever human culture and the course of history.

For most of the period following the fall of Rome, the adherents of a powerful new monotheistic religion dominated medieval long distance commerce as completely as the West dominates such commerce today; the legacy of that former dominance is still all too visible.

The coming of the Prophet would sweep away this fragmented and pluralistic pattern of trade in the ancient world. Within a few centuries of Muhammad's death, one culture, one religion, and one law would unify the commerce of the Old World's three continents nearly a millennium before the arrival of the first European ships in the East.

The incense trade catalyzed the birth of Islam, whose military, spiritual, and commercial impacts transformed medieval Asia, Europe, and Africa. Riding on a rising tide of global trade along the land and sea routes of Asia, Islam came to dominate that continent's spiritual as well as its commercial life.

The Stoic philosopher and playwright Seneca is said to have owned five hundred tripod tables with ivory legs—no small irony, since he was a vocal critic of the empire's extravagances.

The Umayyad and Abbasid empires were in effect large free-trade areas in which old borders and barriers had been swept away, especially along the Euphrates River, since remotest antiquity the traditional frontier between the East and West. No longer were the three great routes to Asia—the Red Sea, the Persian Gulf, and the Silk Road— competing alternatives; rather, they were an integrated global logistic system available to all parties who recognized the suzerainty of the caliphate.

Western notions of individual autonomy and rule of law simply do not apply in the desert. An attack on one tribesman is an attack on all, and in a landscape where a murderer can quickly and quietly slip away, it matters little whether the accused is guilty or innocent. His entire clan is held accountable for thar—retribution. The resulting skein of honor and revenge, so familiar in the modern Middle East, is eternal, seemingly without beginning and without end. When the first recourse of victims is to their cousins, and not to the police or to an independent judicial system, poverty and political instability are the usual outcomes.

What investment banking is to the ambitious and acquisitive today, the pepper trade was to the Romans—the most direct route to great riches.

When Vasco da Gama breached the Indian Ocean, the playing field had just been vacated by the one force capable of repelling him.