If You Understand This, You’ll Never Fear a Market Crash Again

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Dec 15, 2025

William J. Bernstein, an influential author and investment theorist, shares his journey into investing and the importance of a scientific approach. He highlights behavioral biases as the greatest investment risk, offers practical advice for young investors, and compares TIPS with annuities for retirement. Bernstein argues for broad global indexing to maximize gains and emphasizes that investing should focus on avoiding poverty rather than seeking wealth. He also discusses the risks of cryptocurrency and offers insights on market psychology.

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ADVICE

Prefer Passive Indexed Investing

Use a passive, indexed approach to investing to beat most professionals over the long run.
Learn by doing and validate with classics like Malkiel and Bogle to build confidence.

INSIGHT

Evolution Explains Investment Behavior

Human evolution made us react to immediate threats, not decade-long risks like investing.
That mismatch makes individual behaviour the biggest investment risk, not the market.

INSIGHT

Human Capital Changes Optimal Allocation

Young people's human capital behaves like a bond, so they can theoretically hold higher equity weights.
But design portfolios for the worst 1–2% scenarios to avoid breaking compounding through panic.

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Most of us just want to know one thing: what’s the best way to invest? Decades ago, William J. Bernstein had the same question, so he decided to find out. That led him to become an early supporter of the simple, evidence-based approach: keeping costs low, diversifying widely, and not trying to beat the market. It’s basically the philosophy behind modern index investing and he shared it through several classic books, including The Four Pillars of Investing.

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If you don’t know Bill’s work here’s where I suggest you start:The Four Pillars of Investing: https://amzn.eu/d/hKCTHVJ

The Intelligent Asset Allocator (recommended by Jack Bogle himself): https://amzn.eu/d/6NKLjTu

The Investor’s Manifesto: https://amzn.eu/d/3kDgo57

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If you purchase a product or service using one of the links above, we may receive a commission. There will be no additional charge for you. Remember investments can fall and rise - and past performance is no guarantee of future results. Other fees may apply. Your money is at risk.

This is not financial advice. The reason it’s not financial advice is because it’s not tailored to you. We explain the principles of building wealth but if you want personalised advice, it’s worth speaking to a financial advisor. As with everything financial, please do your own research. We really encourage that because no one cares more about your money than you and if you learn the basics then it will change your life.

Chapters:

00:00 - Moneyweek Ad

01:07 - Learning How To Invest

05:07 - What To Read (And What Not To Read)

09:07 - Ignore Forecasts

12:07 - The Biggest Risk In Investing

16:59 - Vanta Ad

18:12 - Should you be in 100% Equities?

24:03 - How To Fight Inflation

29:28 - Bitcoin

32:18 - Learning From History

35:49 - TaxZap Ad

37:03 - Are Too Many People Passive?

43:50 - Don’t Invest To Get Rich

46:07 - Returns Over The Next 100 Years

49:52 - Will You Survive Retirement?

01:00:23 - Why Young People Want A Bad Stock Market