A Random Walk Down Wall Street by Burton Malkiel is an investment classic. It was first published in 1973 and is a great book for anyone wanting to learn about investing. It is now its 12th edition!
This book is famous for the argument that a “blindfolded monkey” could throw darts at a dartboard to choose stocks and do better than investment professionals. This was shocking and upset many Wall Street professionals.
A Random Walk Down Wall Street argues that daily stock prices are random so investors should buy and hold the entire stock market. There is no reason to have professional investors trading on the randomness of the market prices. Malkiel proposed that there should be funds that buy and hold the entire stock market index. This was three years before the first index fund opened in 1976.
“A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”Burton Malkiel, 1973
This book led to the rise of index funds. Index funds buy an entire market index like the S&P 500. These funds do not trade on news or market changes. They simply buy and hold all the stocks in a market index.
Index funds have been so beneficial to investors. They provide low-cost investments for the entire market. These index funds are great for investors. They provide a low-cost way to invest to cut out all the high fees and the trading costs.
This book is the foundation of our Finally Learn 10 Investment Maxims to Build Wealth. I highly recommend this book.
Burton Malkiel Interview
Burton Malkiel is a great friend of the individual investor. Here is a fascinating interview.
A Random Walk Down Wall Street: An Investment Classic
I first read this book years ago, but I purchased the latest edition and can’t wait to read it all over again.
Have you read A Random Walk Down Wall Street? What do you think about this classic book? What other books do you recommend? Let me know in the comments below.