"A Random Walk Down Wall Street"

Paper Summary:

This paper explains Malkiel's thesis which is long-term planning. The paper discusses how the author asserts the short-term volatility of the market and asserts that forward-thinking, self-guided financial planning can improve anyone's investment portfolio and reap long-term rewards. It points out that Malkiel not only discusses how an individual investor can profit through stock market investments but also through managing Individual Retirement Accounts (IRAs), mortgages, and life insurance.

From the Paper:

"According to Burton G Malkiel, in the Preface of his classic investor's guide, A Random Walk Down Wall Street, "the market prices stocks so efficiently that a blindfolded chimpanzee throwing darts at the Wall Street Journal can select a portfolio that performs as well as those managed by the experts," (15). As A Random Walk Down Wall Street has been around since 1973 and Malkiel has continually revised the book according to the changing realities the marketplace, his premise that individual investors can fare far better in the long run by independently buying index funds than by relying on financial professionals to compile mutual funds or offer advice on securities. Because Malkiel's theory is not universally accepted, the author provides ample concession and acknowledges the main points of his critics; he shields such criticisms with ease and aplomb."

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