Summary of The Four Pillars of Investing

Lessons for Building a Winning Portfolio

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The Four Pillars of Investing book summary
William J. Bernstein believes stocks are your best bet for a retirement nest egg – but follow the crowd at your peril.


8 Overall

8 Applicability

7 Innovation

9 Style


Investment pro and author William J. Bernstein provides a crash course in the vagaries of Wall Street as he outlines his “four pillars of investing”: its theory, history, psychology and business. Wise, insightful, skeptical and snarky, Bernstein proves a friend of the everyday investor. In plain, entertaining language, he presents a strong case for investing in stocks, arguing that they’re the only way to hit your retirement goals. Bernstein urges discipline and caution. He disdains Wall Street’s herd mentality and advocates low-cost index funds. In a few cases, his analysis can get a bit confusing, and some of his examples in this classic have fallen out-of-date. Still, his solid primer offers a good grounding in the basics of wise investing. While never giving investment advice, getAbstract recommends Bernstein’s wisdom to investors seeking a commonsense, foundational guide to building their portfolios.

In this summary, you will learn

  • How to understand what finance expert William J. Bernstein cites as the “four pillars of investing,”
  • How to construct a sound and profitable portfolio,
  • Why individual investors have little hope of beating the market, and
  • What psychological shortcomings sabotage investors.


“The Theory of Investing”
From day to day, stock markets are unpredictable. They soar beyond all logic and plunge to unreasonable levels. The wise investor knows short-term moves are random, and trying to time them is a fool’s game. Over decades and centuries, though, the direction is ...
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About the Author

William J. Bernstein is a retired neurologist and co-founder of Efficient Frontier Advisors, an investment management firm. He is the author of five books, including A Splendid Exchange.

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