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Economic Historian Peter Bernstein Dies at 90

Capital Ideas author had knack for making sophisticated research accessible and actionable.

Economic historian and author Peter Bernstein, 90, died on Friday in New York City. He wrote many articles and books on economics and portfolio management, and was the first editor of the Journal of Portfolio Management.

He was perhaps most famous for his book Capital Ideas (1991), a lively intellectual history of the doctrines of the efficient market hypothesis (EMH) and modern portfolio theory (MPT), which he followed up in 2007 with Capital Ideas Evolving.

These ideas, which originated at the University of Chicago in the 1950s and 1960s, are the intellectual basis of index funds, as they inspired academic research showing that few active managers are able to beat the market. Modern portfolio theory also provided mathematical support for the idea that diversification--both among stocks and among asset classes like equities, bonds, real estate, and cash--can reduce risk.

Bernstein had a knack for explaining sophisticated research in ways that ordinary financial advisors and investors could understand and implement in his Capital Ideas books as well as Against the Gods: The Remarkable Story of Risk (1996) and The Power of Gold (2000).