Efficient Frontier 
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William J. Bernstein

Deep Risk

Third e-Book in the Investing for Adults Series

Deep Risk, the third book in the Investing for Adults series, is now available for purchase in both Kindle and paperback formats.

As you should know by now, the entire Investing for Adults series is not for beginners. This certainly holds true for the latest installment, Deep Risk. The first two e-books, The Ages of the Investor and Skating Where the Puck Was, discussed the mechanics of life-cycle theory for the average investor and the pitfalls of "alternatives" for institutional investors, respectively.

In this third e-book, I examine the nature of risk. The major premise is that short-term volatility of financial assets, commonly measured as standard deviation, is a lousy measure of the actual long-horizon perils faced by real-world investors, who are subject to the vicissitudes of financial and military history. These risks have names -- inflation, deflation, confiscation, and devastation -- and any useful discussion of portfolio design must incorporate their probabilities, consequences, and costs of mitigation.

As always, if this series isn't for you, don't be discouraged; I've put together a reading list for those who need to start with the basics. The list looks daunting, but remember, you have all the time in the world to get this right. Read just one of the books on the list every month, and within a year you'll know more about finance than most professionals. You won't be sorry.

My next e-publishing effort will likely be a full-length overview of portfolio theory and of both investment strategy and nuts-and-bolts execution for adult investors. This as-yet untitled effort will update and expand The Intelligent Asset Allocator, an "adult book" that is now nearly two decades old.

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