A Random Walk Down Wall Street is famous for the argument that a blindfolded monkey throwing darts would choose stocks that outperform investment professionals.
This book started the index fund industry.
A Random Walk Down Wall Street by Burton Malkiel argues that daily stock prices are random so investors should buy and hold the entire stock market. There is no skill in stock picking if the prices are random. So, there is no reason to pay high fees to brokers or advisors.
Malkiel proposed that there should be funds that buy and hold the entire stock market index. This is the basis of This was three years before the first index fund opened in 1976.
A Random Walk Down Wall Street by Burton Malkiel [buy on Amazon] is an investment classic. It is a great book for anyone wanting to learn about investing. It is now its 13th edition!
“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
Index Funds
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.
Jeff Mankin teaches financial literacy and Excel. He is the founder of Finally Learn.
