A Random Walk Down Wall Street
Burton G. Malkiel · 1973
Princeton economist Burton Malkiel makes the case that stock prices move so unpredictably that a blindfolded monkey throwing darts at the financial pages could pick a portfolio as good as the experts' and shows why low-cost index funds, not stock-picking or market timing, are the surest path to wealth.
Classic argument for passive index investing over stock-picking and market timing.
Three of the ideas you’ll keep
The Clif summary of A Random Walk Down Wall Street pulls out 7 insights. Here are the first three.
- Stop trying to beat the market and buy it instead: put the core of your portfolio in low-cost, broad-based index funds that simply track the whole market rather than chasing individual winners.
- Start saving early and automatically, because compounding is the real engine of wealth: use the Rule of 72 (divide 72 by your return to find the years it takes money to double) to see how powerful time is.
- Use dollar-cost averaging: invest a fixed amount on a fixed schedule so you buy more shares when prices are low and fewer when they're high, removing the temptation to time the market.
The other 4 — and the full 8-minute summary — are in the app.
What’s inside: 8 chapters
The whole summary runs about 8 minutes, read or listened to.
- Two Ways to Value a Stock
- Crowds Go Mad: A History of Bubbles
- Why Chart-Reading Doesn't Work
- Why the Experts Can't Beat the Market Either
- Understanding Risk and Return
- Behavioral Finance: Your Own Worst Enemy
- The Life-Cycle Guide to Investing
- Putting It All Together: The Random Walker's Playbook
Finish A Random Walk Down Wall Street tonight.
Read or listen to the full summary in about 8 minutes, then keep the ideas with a minute of review a day. Start with the 2-minute quiz — no card required.
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