William J. Bernstein is an American financial theorist, known for pioneering research in the field of Modern Portfolio Theory. Bernstein is also highly regarded for his self-help finance books for individual investors who wish to manage their own equity portfolios.[1][2]. He currently lives in North Bend, Oregon. Capital Market Line Modern portfolio theory (MPT) proposes how rational investors will use diversification to optimize their portfolios, and how a risky asset should be priced. ... North Bend, is a city in Coos County, Oregon, United States. ...

Biography

Bernstein is a leading light amongst financial theorists who follow the equity or index allocation school of thought, believing that all equity selection strategies should be focused on allocating between asset classes, rather than selecting individual stocks and bonds, or from the timing of their sales. Bernstein's first book, The Intelligent Asset Allocator, makes this case in detail; his second book, The Four Pillars of Investing: Lessons for Building a Winning Portfolio (McGraw-Hill, 2002; ISBN 0071385290), is aimed for those less comfortable with statistical thought. It also puts asset-class returns into long-term historical perspective.

Bernstein is an exponent of Modern Portfolio Theory, which stands in stark contrast to the view that skilled managers can succeed in picking particular investments that will outperform the market, whether through market timing, momentum investing, or finding assets whose future value have been underestimated by the market. He argues that the financial research literature shows that most return is determined by the asset allocation of the portfolio rather than by asset selection. Capital Market Line Modern portfolio theory (MPT) proposes how rational investors will use diversification to optimize their portfolios, and how a risky asset should be priced. ... Asset allocation A large part of financial planning is finding an asset allocation that is appropriate for a given person in terms of their appetite for and ability to shoulder risk. ...

Bernstein's third book, The Birth of Plenty is a history of the world's standard of living; it proposes four conditions that have historically been necessary for it to rise. His fourth book, A Splendid Exchange: How Trade Shaped the World, published in April 2008 by Grove Atlantic, is a history of trade. [3]

Bernstein holds a Ph.D. in Chemistry and an M.D. in neurology; he practiced neurology until retiring from the field.

External links

Bernstein maintains a website with his ongoing journal entries at www.efficientfrontier.com

The first chapter of The Birth of Plenty can be read at [4]

A talk on the book by Bernstein in the authors@google series can be viewed at [5]