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A Random Walk Down Wall Street Tenth Edition: The Time-tested Strategy For Successful Investing Paperback – Dec 20 2011
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It's unlikely that you'll spot many dog-eared copies of A Random Walk floating amongst the Wall Street set (although bookshelves at home may prove otherwise). After all, a "random walk"--in market terms--suggests that a "blindfolded monkey" would have as much luck selecting a portfolio as a pro. But Burton Malkiel's classic investment book is anything but random. Since stock prices cannot be predicted in the short term, argues Malkiel, individual investors are better off buying and holding onto index funds than meddling with securities or actively managing mutual funds. Not only will a broad range of index funds outperform a professionally managed portfolio in the long run, but investors can avoid expense charges and trading costs, which decrease returns.
First published in 1973, this seventh printing of a A Random Walk looks forward and does so broadly, examining a new range of investment choices facing the turn-of-the-century investor: money-market accounts, tax-exempt funds, Roth IRAs, and equity REITs, as well as the potential benefits and pitfalls of the emerging global economy. In his updated "life-cycle guide to investing," Malkiel offers age-related investment strategies that consider one's capacity for risk. (A 30-year-old who can depend on wages to offset investment losses has a different risk capacity from a 60-year-old.) In his assessment of rocketing Internet stocks, Malkiel defends his "random" position well, explaining how "the market eventually corrects any irrationality--albeit in its own slow, inexorable fashion. Anomalies can crop up, markets can get irrationally optimistic, and often they attract unwary investors. But eventually, true value is recognized by the market, and this is the main lesson investors must heed." Written for the financial layperson but bolstered by 30 years of research, A Random Walk will help individual investors take charge of their financial future. Recommended. --Rob McDonald --This text refers to an out of print or unavailable edition of this title.
From Publishers Weekly
Latest edition of Princeton professor Malkiel's bestselling investment guide.
Copyright 1996 Reed Business Information, Inc. --This text refers to an alternate Paperback edition.
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In this book I will take you on a random walk down Wall Street, providing a guided tour of the complex world of finance and practical advice on investment opportunities and strategies. Read the first page
Front Cover | Copyright | Table of Contents | Excerpt | Index | Back Cover
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Burton Malkiel correctly states that stock markets are not always rational, but that markets do over time correct themselves. He successfully presents a rational case that true value is eventually recognized by the market and this is "the lesson that investors must heed."
This book explores in more detail than many others the underpinnings of efficient market theory and its implications for the individual investors. Should you have any doubts about the value of adopting a long-term strategy of matching, and not attempting to beat, the market, then you should read this book.
In terms of practical application to actual investment decisions, the text not only sets forth efficient market theory but also concludes with some insightful observations about low-cost stock index funds and, if you must, how to play the game of choosing individual stocks.
There will be a few people who have beat the market, and will beat the market in the future. As Malkiel notes, statistics tell us that a very few individuals and investment managers will randomly beat the market over a ten year period. But this is part of the randomness, not the counter to the underlying theory.Read more ›
Put simply, Malkiel's argument is that buying and holding an index fund is the easiest way for the average joe to make money in the market if they are willing to hold on tight during the market dips. He does not discourage the outright purchase of individual securities as well as other more risky financial instruments, but he does demonstrate that the odds are stacked against you for long term success in such endeavors when all the pitfalls are considered (i.e. capital gains taxes, brokerage commissions, the utter folly in trying to time your buys/sells, your ability to sleep soundly, etc.).
I would also point out that the book is not without it's more technical sections. Much of it involves some minor mathematical examples. Nothing beyond the level of high school algebra and statistics, but if you are not enthralled with such a prospect then you might look for something more fuzzy such as The Motley Fool Investment Guide by the Brothers Gardner or One Up On Wall Street by Peter Lynch. Both of these works also herald the index fund while offering suggestions for individual stock picking strategies for the more daring/foolish/Foolish among us.
Overall you may find this book to be iconoclastic in it's approach to the Wall Street Wise. Remember that the majority of mutual funds have underperformed the market averages over the long term - food for thought.
Most recent customer reviews
For me, after reading many books on investing in the stock market and the market in general, this book is #1.Published 28 days ago by E Watt
Great book. Helped me to take action on buying stocks by providing me with a clear path and guiding me down it. Read morePublished 5 months ago by Jack Slaven
Little bit too old and out dated but the idea of index fund is goodPublished 19 months ago by Brezina Vladimir
This book must be the worst investment book I have ever read.... I have read hundreds. For me to take the time to write this review, it's got to be really, really, really, bad. Read morePublished on June 30 2013 by Canuck2004
The book focuses on the efficient market theory. Whether or not you agree with the theory, this book provides a great deal of background on overall investing. Read morePublished on July 28 2003 by K. John
As a 25 yr old newbie with no investment experience and money not yet in the stock market, Malkiel does a great comprehensive job of laying out the theories which drive the market... Read morePublished on July 22 2003 by James Romero
This is the definitive tome on the "Random Walk" theory of economics - that you can't base tomorrow's price of stock based on it's historical price. Read morePublished on June 10 2003 by therosen
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