[...]... edition of A Random Walk Down Wall Street The message of the original edition was a very simple one: Investors would be far better off buying and holding an index fund than attempting to buy and sell individual securities or actively managed mutual funds I boldly stated that buying and holding all the stocks in a broad stock-market average was likely to outperform professionally managed funds whose high expense... Ibbotson, Deborah Jenkins, Barbara Johnson, George S Johnston, Kay Kerr, Walter Lenhard, James Litvack, Ian MacKinnon, Barbara Mains, Jonathan Malkiel, Sol Malkiel, Whitney Malkiel, Edward Mathias, Jianping Mei, Melissa McGinnis, Will McIntosh, Kelley Mingone, William Minicozzi, Keith Mullins, Gabrielle Napolitano, James Norris, Gail Paster, Emily Paster, H Bradlee Perry, George Putnam, Donald Peters,... academics had joined the professionals in arguing that the stock market was at least somewhat predictable after all Still, as you can see, a tremendous battle is going on, and it’s fought with deadly intent because the stakes are tenure for the academics and bonuses for the professionals That’s why I think you’ll enjoy this random walk down Wall Street It has all the ingredients of high drama—including fortunes... everything, and the value of nothing —Oscar Wilde, Lady Windermere’s Fan 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 Many people say that the individual investor has scarcely a chance today against Wall Street s professionals They point to professional investment strategies... investors can build castles in the air Rule 4: Trade as little as possible The Substitute-Player Step: Hiring a Professional Wall Street Walker The Morningstar Mutual-Fund Information Service The Malkiel Step A Paradox Some Last Reflections on Our Walk A Final Word A Random Walker’s Address Book and Reference Guide to Mutual Funds PREFACE IT HAS NOW been forty years since I began writing the first... of Risk: Arbitrage Pricing Theory The Fama-French Three-Factor Model A Summing Up 10 BEHAVIORAL FINANCE The Irrational Behavior of Individual Investors Overconfidence Biased Judgments Herding Loss Aversion Pride and Regret Behavioral Finance and Savings The Limits to Arbitrage What Are the Lessons for Investors from Behavioral Finance? 1 Avoid Herd Behavior 2 Avoid Overtrading 3 If You Do Trade: Sell... Bontas, Jonathan Curran, Barry Feldman, Ethan Hugo, Amie Ko, Paul Messaris, Matthew Moore, Ker Moua, Ellen Renaldi, Barry Schwartz, Greg Smolarek, Ray Soldavin, Elizabeth Woods, Yexiao Xu, and Basak Yeltikan Helen Talar, Phyllis Fafalios, Lugene Whitley, Melissa Orlowski, and Diana Prout not only faithfully and accurately typed several drafts of the manuscript but also offered extremely valuable research... Innovations such as e-mail, the Internet, iPhones, iPads, Kindles, videoconferencing, social networks, and new medical advances ranging from organ transplants and laser surgery to nonsurgical methods of treating kidney stones and unclogging arteries have materially affected the way we live Financial innovation over the same period has been equally rapid In 1973, when the first edition of this book appeared, we... Peter Asch, Leo Bailey, Howard Baker, Jeffrey Balash, David Banyard, William Baumol, Clair Bien, G Gordon Biggar Jr., John Bogle, Lynne Brady, John Brennan, Markus Brunnermeier, Claire Cabelus, Lester Chandler, Andrew Clarke, Abby Joseph Cohen, Douglas Daniels, Pia Ellen, Andrew Engel, Steve Feinstein, Barry Feldman, Roger Ford, Stephen Goldfeld, William Grant, Leila Heckman, William Helman, Roger Ibbotson,... and, as Garber reveals, was valued greatly even in the years before the tulipmania Moreover, Garber’s research indicates that rare individual bulbs commanded high prices even after the general collapse of bulb prices, albeit at levels that were only a fraction of their peak prices But Garber can find no rational explanation for such phenomena as a twenty-fold increase in tulip-bulb prices during January . videoconferencing, social networks, and new medical advances ranging from organ transplants and laser surgery to nonsurgical methods of treating kidney stones and unclogging arteries have materially affected. Norton & Company, Inc., 500 Fifth Avenue, New York, NY 10110 Library of Congress Cataloging-in-Publication Data Malkiel, Burton Gordon. A random walk down Wall Street: the time-tested strategy.