Darst, El-Erian and Shiller on Investing

As the financial sector continues to scramble for survival (as seen this week with the government-brokered buyout of Washington Mutual(WM Quote - Cramer on WM - Stock Picks) by JP Morgan Chase(JPM Quote - Cramer on JPM - Stock Picks) and the decision by Goldman Sachs (GS Quote - Cramer on GS - Stock Picks) and Morgan Stanley(MS Quote - Cramer on MS - Stock Picks) to become bank holding companies), it seems as if all eyes have now shifted from what happens on Wall Street to the outcome of current "bailout/rescue" debate on Capitol Hill.

In an extraordinary and historic time like this, you might be looking for insight and guidance from those on the front lines of the ever-evolving landscape of business and investing.

If so, following are words of wisdom from David Darst (Morgan Stanley's chief investment strategist), Mohamed El-Erian (PIMCO's Co-CEO and Co-CIO) and Robert Shiller (professor of economics at Yale University), written specifically for TheStreet.com's readers.

From Darst: Pay Attention, Protect Your Assets:

The Little Book That Saves Your Assets was written for one major purpose: to protect your assets in any kind of market environment, while helping the value of your portfolio grow over time.

Among the special features I've included in the book are:

A rundown of the key features of the 11 major asset classes, including the specific benefits and drawbacks of owning them (page 28).

An asset allocation clock, telling you what kind of assets to emphasize in periods of inflation, deflation, economic growth, and economic retrenchment (page 32).

Shortcuts for calculating the pretax portfolio return you will need -- factoring in the impact of inflation -- to live within your means after you retire (page 80).

Read the full version of Darst: Pay Attention, Protect Your Assets.

From Mohamed El-Erian's Guide to Global Investing:

In today's markets, investors must navigate the simultaneous deleveraging of three distinct, though inter-related, balance sheets: those of the financial system, the housing sector and the consumer. The challenge goes well beyond just side-stepping the damage associated with the forced shrinkage of any one of these balance sheets; investors must also steer around the inevitably messy and unpredictable feedback loops resulting from the interaction of the three balance sheets.

For investors that hold long positions in any risk assets (such as equities and corporate bonds), the impact has been similar to that felt when oxygen is sucked out of a room: Everyone feels dazed and struggles to catch his or her breath, and the weak suffer more than the strong.

In other words, the process creates broad-based risks that, initially, are felt by all. Investors experience highly correlated declines across a number of domestic and international markets -- with the weakest segments subject to major turmoil. But the process also gives rise to isolated pockets of opportunities that can be highly rewarding.

Read the full version of Mohamed El-Erian's Guide to Global Investing.

From Shiller: Financial Infrastructure Must Improve:

The crisis should result in major changes in our financial infrastructure. This will happen only over a period of years into the future. Many segments of the financial services industry will respond to criticism that they gave bad advice, or, in many cases, no advice. They will be responding to increasing regulatory pressure to clean up their act. But they will also be responding to public pressure towards a more rational economic system.

There should be pressures towards a democratization of finance, meaning developing the financial infrastructure to involve more people in high-level information acquisition.

Read the full version of Shiller: Financial Infrastructure Must Improve.