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
The most superior Burton Malkiel quotes to get the best of your day
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.
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.
It's not that stock prices are capricious. It's that the news is capricious.
Index funds do not trade from security to security and, thus, they tend to avoid capital gains taxes.
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.
We conclude that hedge funds are far riskier and provide much lower returns than commonly supposed.
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.
Stupidity well packaged can sound like wisdom.
Never buy anything from someone who is out of breath.
It's like giving up a belief in Santa Claus.
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.