William J. Bernstein Quotes

Most investors would be better off in an index fund.

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

Everybody has a different strategy, but everybody agrees that active management does not beat the market.

The average investor's return is significantly lower than market indices due primarily to market timing.

Most people might just as well buy a share of the whole market, which pools all the information, than delude themselves into thinking they know something the market doesn't.

Here is a dirty little secret: Stock-picking is wildly overrated. Sure, it makes for great cocktail party chatter, and what is more fun than delving into a company's new products? But the truth is that individual stocks are riskier than broad indices.

Mutual fund managers are trapped in this rather deadly vicious circle: the more successful they are, the more money flows into their mutual fund. Then, it is more difficult for them to beat the market averages or even to match their own past performance.

The philosophy to 'buy and hold' is a philosophy that I use to manage funds.

There is general agreement among researchers that nearly all stock pickers, whether they know it or not-and few of them do-are playing a game of chance.

Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.

To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.

Still, I figure we shouldn't' discourage fans of actively managed funds. With all their buying and selling, active investors ensure the market is reasonably efficient. That makes it possible for the rest of us to do the sensible thing, which is to index. Want to join me in this parasitic behavior? To build a well-diversified portfolio, you might stash 70 percent of your stock portfolio into a Wilshire 5000-index fund and the remaining 30 percent in an international-index fund.

Owning stocks is like having children - don't get involved with more than you can handle.

The scary truth is 96 percent of mutual funds fail to match the market, and the 4 percent that do, they're always changing.

All the time and effort people devote to picking the right fund, the hot hand, the great manager have, in most cases, led to no advantage.

Index funds eliminate the risks of individual stocks, market sectors, and manager selection. Only stock market risk remains.

It's 1450 out of 1500 ETF funds that I just wouldn't touch because they're not diversified enough. Or they have some huge speculative twist to them that if you can guess the markets right you will do very well for a day or two but who can do that? Nobody.

The debate can be put in the form of the question: Resolved, that the best of money managers cannot be demonstrated to be able to deliver the goods of superior portfolio-selection performance. Any jury that reviews the evidence, and there is a great deal of relevant evidence, must at least come out with the Scottish verdict: Superior investment performance is unproved.

Mutual funds are an overrated investment heavily promoted by Wall Street.

If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks.

The active investors will have their returns diminished by a far greater percentage than will their inactive brethren. That means that the passive group - the "know-nothings" - must win.

Index investing outperforms active management year after year.

You could lose hundreds or thousands one day on paper and gain it all back the next, and it has literally no effect on your immediate future, provided the money you have in the market is money you're investing for the long haul (meaning at least three to five years).

I had some airline stock, but the airlines tanked. I didn't have a lot of money in them, though.

The mandate that I got from my investors is to invest. So far, we are on the right track, and it is the right formula to invest in Indonesia.