Top 31 Quotes & Sayings by William J. Bernstein

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

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.

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.

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

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

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.

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.

The key aspect of an index fund is that many of them, not all of them, but many of them are extremely cheap.

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

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

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.

If your broker or investment advisor is not familiar with the concept of standard deviation of returns, get a new one.

All the things that make us human make us terrible investors and you have to understand what they are and how to avoid them.

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.

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).

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

The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.

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

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.

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

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

99% of fund managers demonstrate no evidence of skill whatsoever.

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.

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.

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

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.

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.

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?

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.

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