Burton Malkiel Professions : Economist Born : August 28, 1932 Browse All Authors Top 16 quotes by Burton Malkiel 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 monkeys pages experts J.P. Morgan once had a friend who was so worried about his stock holdings that he could not sleep at night. The friend asked, 'What should I do about my stocks?' Morgan replied, 'Sell down to your sleeping point' Every investor must decide the trade-off he or she is willing to make between eating well and sleeping well. High investment rewards can only be achieved at the cost of substantial risk-taking. So what is your sleeping point? Finding the answer to this question is one of the most important investment steps you must take. Burton Malkiel eating-well sleep night Trust in time rather than timing. Burton Malkiel timing Never buy anything from someone who is out of breath. Burton Malkiel breaths Experience conclusively shows that index-fund buyers are likely to obtain results exceeding those of the typical fund manager, whose large advisory fees and substantial portfolio turnover tend to reduce investment yields. Many people will find the guarantee of playing the stock-market game at par every round a very attractive one. The index fund is a sensible, serviceable method for obtaining the market's rate of return with absolutely no effort and minimal expense. Burton Malkiel yield games people Index funds have regularly produced rates of return exceeding those of active managers by close to 2 percentage points. Active management as a whole cannot achieve gross returns exceeding the market as a while and therefore they must, on average, underperform the indexes by the amount of these expense and transaction costs disadvantages. Burton Malkiel investing cost average Stupidity well packaged can sound like wisdom. Burton Malkiel wells stupidity sound I have become increasingly convinced that the past records of mutual fund managers are essentially worthless in predicting future success. The few examples of consistently superior performance occur no more frequently than can be expected by chance. Burton Malkiel investing example past Historically, the stock market is like a gambling casino with the odds in your favor. Over the long pull, stocks are given something like nine and a half to ten percent compounded per year. The banks have probably given you something in the order of four to five. Burton Malkiel gambling odds order It's not that stock prices are capricious. It's that the news is capricious. Burton Malkiel capricious investing news Many of us economists who believe in efficiency do so because we view markets as amazingly successful devices for reflecting new information rapidly and, for the most part, accurately. Burton Malkiel successful views believe Index funds are... tax friendly, allowing investors to defer the realization of capital gains or avoid them completely if the shares are later bequeathed. To the extent that the long-run uptrend in stock prices continues, switching from security to security involves realizing capital gains that are subject to tax. Taxes are a crucially important financial consideration because the earlier realization of capital gains will substantially reduce net returns. Burton Malkiel friendly running long Index funds do not trade from security to security and, thus, they tend to avoid capital gains taxes. Burton Malkiel investing taxes gains The surest way to find an actively managed fund that will have top-quartile returns is to look for a fund that has bottom-quartile expenses. Burton Malkiel investing looks way We conclude that hedge funds are far riskier and provide much lower returns than commonly supposed. Burton Malkiel investing fund return It's like giving up a belief in Santa Claus. Burton Malkiel santa investing giving-up Similar Authors Bryan Caplan economist Bruno Frey economist Brian Wesbury economist Branko Milanovic economist Andrew Samwick economist Arnold Kling economist All Authors
