And Everything in Between - Preparing for Prosperity

I bought 10 books from the store and scanned or read all of them in search of the best book to complement the taxes on investments material I teach. This book is definitely the best. It will help to teach my students what I want them to understand about investing as they begin their careers.

A good book which would normally deserve five stars if not for the fact that nearly all the material is a rehash of his two previous books (The Intelligent Asset Allocator, Four Pillars). For those who have read these I would not recommend "Manifesto". For those who haven't, I would recommend the earlier books instead. My favorite happens to be The Intelligent Asset Allocator. I also have to agree with the reviewer who noted that the title is a little overblown given the content.

I loved Bernstein's first book on asset allocation. It so thoroughly covered the subject matter, that all other books on asset allocation seem like pale substitutes. Additionally, the book went into the underlying math, which really helped me grasp some of the more abstract concepts.

In contrast, The Investor's Manifesto has more in common with the aforementioned pale substitutes than it has with Bernstein's first book. It rehashes the same material, but dumbed down. Anyone who needs an investment book this dumbed down really should stay away from investing, which is ironically the gist of Bernstein's thesis. Other than an expanded history section, this book has little to offer the reader.

So, do yourself a favor. Read The Intelligent Asset Allocator or save yourself a fortune and avoid investment like the plague.

I was first introduced to the Efficient Market Hypothesis and the Efficient Frontier by the _Intelligent_Asset_Allocator_, but thought it was a bit math-centric for the average investor (I have a Masters in Electrical Engineering, so the math wasn't too much for me). The _Intelligent_Asset_Allocator_ also introduced me to the idea of uncorrelated asset classes.

I thought the _Four_Pillars_of_Investing_ was geared more toward the average investor, and recommended it to people who asked for a good investing book, with a secondary recommendation of _Intelligent_Asset_Allocator_ for those who weren't math-phobic.

Berstein cuts to the chase early in _Investor's Manifesto_, and never relents. He hits the high spots of _Four_Pillars_of_Investing_, and, without math, gives the adavantage of using uncorrelated asset classes, without really using the words.

He does warn that when you most need diversification to work, is when its most likely not to work. He also warns that rebalancing uncorrelated assets will add about 1% to your annualized return. But, according to him, you spend a minimal amount of time rebalancing because you only do it once every few years.

An alternative to Berstiens rebalancing frequency is Ric Edelmann in his various books, _Rescue_Your_Money_ being his most recent. Edelmann checks his clients' portfolios every day, and could theoretically rebalance that often. I prefer Edelmann's approach; I check about every week.

Still, this book will encourage the average investor to break ties with his broker (I say they call them broker because their aim is to make their clients "broker").

. . . it was entitled The Four Pillars of Investing: Lessons for Building a Winning Portfolio and was about three times as dense. Let's face facts here: this little book is a diminutive reconstruction of the four pillars Bernstein erected so prominently there. Investing theory, history, psychology, and business all rise from these pages, and atop are Bernstein's model portfolios. But other than an additional peak into the neuroscience of investing (which is a small addition to his take on investing psychology), there isn't much you can see in this manifesto that Bernstein hasn't put on display before.

On another note, Bernstein's dry sense of humor and pithy approach to investing--like his admonition that you can't win the game unless you don't play it--are still a refreshing approach to the otherwise banal stack of investing literature you'll find on your library's bookshelf. The four pillars are sturdy as well. And repackaging a 300-page original into a volume less than half its size will appeal to many looking for a short primer on the financial markets and an investor's discontents. Fans of the original, though, will want more.

Perhaps updating his original work and repackaging it for an audience shaken up by the 2008-09 financial crisis was a good idea at the time. As the Dow Jones Industrial Average and the S&P 500 have roared back, though, much of what was then a fresh perspective now feels a bit stale. As for this reader, I'm still a fan as the content, even in its abbreviated version, still provides the best waypoints for navigating a treacherous financial landscape. It is just not that original.

The Investor's Manifesto (TIM) is as comprehensive as any college textbook on investing and is a great book for beginners because you can trust that the author's recommendations are well researched and founded in academia. It covers the major financial theories that form the bedrock of modern finance. A lot of that math "stuff" is left out to appeal to a wider audience; hence, why it is not the size of a college textbook.

TIM argues that the best strategy is to invest in passively managed index funds. He goes into great detail why this is the only strategy that most investors should follow. One whole chapter entitled "Muggers and Worse" talks about how the financial industry's modus operandi is to slowly transfer your wealth from you to them through multitudes of fees. TIM recommends to only invest in companies where the funds are owned by the fund holders (you) and that have the smallest fees across the whole industry.

Here are some further gems of wisdom that were picked up from reading TIM:

*To be a successful investor you must be interested in investing, have knowledge in math and financial history, and have emotional discipline to execute the planned strategy faithfully.

*There are always providers and consumers of capital.

*Calculation for Expected Return of Bonds = Interest Rate - Coupon

*Calculation for Expected Return of Stocks = Dividend Yield + Dividend Growth Rate (which is also known as the Discount Dividend Model or Gordon's Equation).

*Always think in after-inflation or "real" terms.

*Do not trust historical data to estimate future returns. Rely on interest and dividend payouts and their growth/failure rates.

*There are re-balancing strategies (calendar and threshold) that will potentially add value to portfolios due to the tendency for various assets to mean revert (zig and zag) over time.

*Withdrawal rate of retirement accounts should not exceed 3-4% if you want your retirement to survive you.

*Social security is a great annuity if you wait to 70.

There are many books on investments. This is one of the great ones in my opinion. It is my favorite since Swenson's Unconventional Success,
and is much better written that that one.

The points are somewhat familiar. Trying to pick stocks or pick managers is useless, so stick to low cost index funds. Allocate assets to
minimize risk based on your own personal risk tolerance. Beware of the whole financial industry, which is designed primarily to extract as much
money as possible from you, thus working directly against your financial interest.

This advice will not appeal to many people. It is the old "get rich slow" advice. I suspect many people are far more interested in titles that
supposedly tell you how to make 1 million dollars a year through day trading. Good luck to them. I don't believe it'll happen, Bernstein does not
believe it'll happen either. He thinks stocks going forward may promise 4 to 8 percent per year over the long long term.

His points are strongly supported through reasoned arguments. There is much discussion of the recent turmoil in the financial markets and the good
advice that people should always understand the risks they are taking.

For people who can understand and follow the advice in this book, it could well change their future, particularly young people with long saving times
ahead of them. There are no sure things in the investment world, all you can do is improve your probability for success and decrease your probability
for loss. In my opinion, the strategies espoused in this book are the most sensible and historically successful at putting the odds in your favor. This
goes on my short list of great and highly recommended investment books.

This book is just what we needed! Bernstein is impartial and very well balanced, with nothing to gain from his recommendations, completely trustworthy. He gave my husband and me the confidence to stop paying exorbitant fees a year and a half ago to our financial manager and get going on our own. I took a marker and marked it up like crazy, made notes, and we devised our own plan with Bernstein's help. We're money ahead ahead as a result, and much more at peace about our financial plan. Bernstein does a terrific job of not getting too bogged down, adding humor once in awhile, and explaining things in plain English for the average person. I bought books for all of my siblings this year because I couldn't have a good conscience if I didn't at least know they had this book on their bookshelf, whatever decisions they make.

The Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between by neurologist turned financial consumer advocate and commentator, Dr. William Bernstein. Dr. Bernstein's handy manual lets amateur investors in on many of the tricks of the trade that the smart investment strategists, mutual and hedge fund managers use to get one up on the assorted little guys of the investment world. In addition to exposing the wiles of Wall Street, Dr. Bernstein stresses the importance of building a healthy portfolio through diversification and balance, managing risk and controlling you're your emotional response to the exuberant highs and crushing lows the market dishes out. Dr. Bernstein gives advice on what kinds of stocks and commodities to invest in based on proven track records of high returns and minimal risk.

Dr. Bernstein is adamant in his claim that the markets have undergone profound and dramatic changes in the year since the government takeover of such investment giants as Bear-Sterns and Lehman Bros. Dr, Bernstein argues that these changes make it easier than ever for new and formerly skeptical investors to get involved, because they aren't prejudiced by the types of outmoded thinking that led to the tech bubble burst of the early 2000's and the more recent housing bust of the last two years. Dr. Bernstein's message is clear: the time has never been better to get in on the moneymaking game, provided that you have the right guidance--the kind of guidance `The Investor's Manifesto' provides.

Dr. Bernstein's style of writing is no frills and no-nonsense. His message is peppered with dozens of examples of past investors making the right and wrong decisions when it came to sheltering and growing their assets. If Dr. Berstein is a bull, he is a tame one. He is well known to be a strong consumer advocate with no great love for the professional trading racket.

As a former, practicing neurologist Dr. Bernstein brings a unique set of knowledge and skills to bear on understanding how an individual's own instincts can sometimes work against him or her in the investment arena. Bernstein's approach is scientific, comprehensive and farsighted. 'The Investor's Manifesto' is well-written, incisive and complete. A great pick!

Reading Bernstein's 'Manifesto' I was reminded of another great book that came out recently on how to make smart investment moves with an eye toward a secure retirement. Thomas Scott's Fasten Your Financial Seatbelt: What A Fatal Plane Crash Taught Me About Retirement Planning is very similar in style and tone to Bernstein's 'Investor's Manifesto.' Financial planner, Tom Scott, has built his career on helping amateur investors build solid portfolios that can compete with the top mutual funds and yield high returns over the long haul. Scott has distilled much of his wisdom into a concise, easy-to-read handbook that has the dual advantages of being a little shorter and--for those on a tight budget this holiday season--quite a bit cheaper than the more heavily marketed 'Manifesto.'

For those looking for a variety of perspectives on the matter of investing with confidence, another book of interest is John Girourard's The Ten Truths of Wealth Creation. Published in '07, 'Ten Truths' may seem, at this point, to be an oldie, but it's definitely a goodie!

Simply put, a great book that simplifies investing in general and recommends approaches in creating a diversified portfolio. Many investors play the stock market...and lose. That is a fact. A majority of investors *should* simply invest in low cost funds - indexed funds or managed. This book makes that case and provides simple education thereto.

If you read this book and it strikes a chord, move on the Bogleheads dot Org where members are focused on Jack Bogle's passive investing strategies - William Bernstein occasionally posts on this forum. Again, if you want to invest but preserve your capitol- read this book and stop "playing" the market. You'll sleep better at night.

A quick read that gives you Bernstein's investment approach in a nutshell. And, while it is up-to-date in terms of its references to current events, it really adds little to what you will have learned if you read his earlier, more comprehensive, guides. I suggest "The Intelligent Asset Allocator" above all.

In 'The Investor's Manifesto,' Bernstein makes the same (persuasive) case for index investing that he and numerous other authors have made over the years. Although Bernstein adds some useful insight related to our recent economic troubles, the meat of the book is nothing new, and Bernstein's own 'The Four Pillars of Investing' contains a more thorough treatment of the main themes. I would recommend that book over this one, in addition to the following books: 'A Random Walk Down Wall Street' by Malkiel, and 'Warren Buffett's Letters to Berkshire Shareholders.' In addition to offering timeless advice on index funds and asset allocation over a lifetime, these pages will provide plenty of perspective on past instances of herd mentality that can be easily applied to recent events (i.e. the stock market and credit bubbles) The main lessons don't seem to change.

Concise yet thorough review of investing fundamentals. The author emphasizes long term investment in index funds as opposed to short term stock speculation. It is a must read for anyone managing their own retirement plan.

So let's look at how poorly an investor following Bernstein's advice would have done in recent years, and how easy it is to do MUCH better.

I'll take Berstein's basic portfolio of 40 percent bonds, 18 percent foreign stocks, and 42 percent US stocks. From January 2006 through December 2010 this portfolio returned a total of 18 percent (3.4 percent per year annualized) and suffered a draw down of -34 percent. Bernstein says an investor must just hang in there through such tough times, because you can't really do anything about it that doesn't put you at serious risk for even worse losses.

Nonsense. Let's run the same portfolio, but we will go to cash for any asset that falls below its 10-month moving average. This will protect us from large downside losses while keeping our upside gains. This approach, over the same time period, gives us a total 55.7 percent return (8.4 percent annualized), with a worst draw down of -8.8 percent.

In summary, with this simplistic enhancement of only holding an asset when it is above its 10-month moving average, we TRIPLE Bernstein's return, with only ONE THIRD the draw down! And this is not due to some lucky period during which the moving-average method just happened to protect us. Read THE IVY PORTFOLIO for a demonstration on how this simple method (among others) has provided stock-like returns with bond-like protection over the past 40 years.

Some otherwise very bright investment advisers, like Berstein, simply can't accept that there are safe and proven methods that are better than buy-and-hold index investing. Their stubborness is no service to investors.

Simply stated, this short book changed my investment philosophy. It may be not be sufficiently complicated for those who believe they need "expert" advice or need to do it themselvesThe Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between; however, it is the simplicity of the investment strategy Bernstein champions that makes sense. For those who are investors or have a business background, you may tire of reading about all of those things you knew, and of course, forgot. This book reminds you of them and frees you to begin anew. And if you are a young investor, it should be read three times and remain under you pillow.

I don't recommend this book. Bernstein simply lays out the case for passive investing which has been done many times before and in a better fashion by Jack Bogle, Richard Ferri, etc. He does NOT address Armageddon investing and he does not address the challenges of investing in a world where bonds and other fixed income investments, are clobbered by central bankers that are intentionally devaluing their fiat currencies. I would advise to instead read "The Ivy Portfolio" by Faber.

This book promises that you will learn everything how to invest well in prosperity and Armageddon. I think right here, in order to please everyone - the author promised too much. The book is not only brief, it is also incomplete and over the top. If you truly want to learn how to trade then you need to look at someone like Linda Raschke or Toby Crabel. They are real traders and hedge fund managers that wrote books and still continue to perform amazingly. Their books are out of print. But it is worth every penny. If you are willing to growth and invest professionally.

This book promises that you will learn everything how to invest well in prosperity and Armageddon. I think right here, in order to please everyone - the author promised too much. The book is not only brief, it is also incomplete and over the top. If you truly want to learn how to trade then you need to look at someone like Linda Raschke or Toby Crabel. They are real traders and hedge fund managers that wrote books and still continue to perform amazingly. Their books are out of print. But it is worth every penny. If you are willing to growth and invest professionally.