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The Random Walk Guide to Investing: Ten Rules for Financial Success Hardcover – September 17, 2003
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Top Customer Reviews
Malkiel covers a lot of ground in investments, financial planning, retirement, savings for college, and insurance in just 180 pages. He structures this knowledge through just ten basic rules. Throughout, he includes numerous useful tools. One is the famous rule of 72. If you divide 72 by the investment return, it will tell you how many years it takes to double your investment. Thus, Malkiel covers all the basics and also explores the cutting edge of behavioral economics from the luminaries in this field including Robert Shiller (Irrational Exuberance) and Richard Thaler. This book is just as interesting to the layperson and the investment professional alike.
Malkiel advice can be summarized as follows. Save regularly through 401Ks and other means. Invest in low cost mutual funds and index funds across four asset classes (money market funds, bonds, stocks, and REITs). Invest according to your optimal asset allocation which reflects your time horizon (driven by your age), your financial capacity to absorb losses, and your risk tolerance. Take full advantage of tax advantage investments, including 401Ks, IRAs, Education Savings Accounts. The book includes many more fascinating aspects of investing.
Malkiel outlines eloquently the benefits of index funds. They incur lower operating costs.Read more ›
This book is a delightful exception and I recommend it to everyone as a great first guide to getting yourself on a solid path to financial security and some truly golden years. It is simple to read, contains just the bare minimum of financial terminology and therefore stays intelligible to the average person looking for the truth about their money.
What I like about the approach taken in the ten rules put forward by Burton Malkiel is their universal applicability and the power it puts in the hands of each investor. Of course, it also puts responsibility for his or her financial future in those hands as well. The rules focus on starting to save early, saving in ways that keep your costs low, diversifying your savings so when one bad thing happens it only stings you instead of destroying your future.
The author provides helpful guidelines for building a diversified portfolio to your personality profile and tolerance for risk. I also liked his discussion of portfolio mix related to your age and where your financial interests should be in the various decades of your life. He also suggests working a few extra years and why that could make a big difference.Read more ›
At first we bought various stocks. But unfortunately the companies we thought were "sure things" weren't so great after all. In 2004 we actually lost money in our portfolio, even though the market as a whole did better than that.
After that we tried putting our money into a managed mutual fund. But with the high expense ratio -- combined with the capital gains taxes from all the trading done by the "hotshot" brokers in charge of the fund -- we barely made better than the inflation rate!
Then an MBA friend of ours recommended this book, and it was absolutely life changing. Malkiel explains why broadly-diversified index funds are the way to go. I won't repeat his reasoning here, but it's absolutely spot on.
Since we've taken Malkiel's advice and switched everything over to index funds, we're finally making the market rate of return. Investing is now a no-brainer, and on a long enough timespan, we WILL now become rich.
Most Recent Customer Reviews
This book is a good starter for those wanting to learn how to invest and all the options that are available. It's not all about the stock market. Read morePublished 6 months ago by Laura Dulaney
A good well written book with common sense, which is not always that common, advice on investing. You will not get burned if you follow it. Read morePublished 12 months ago by old dude
Great easy read better than all the publicity pundit that rehash like chimps this is the real deal he did what he talk not write about what other did. Read morePublished 14 months ago by jerry l. li
This book is pretty famous, and it does a decent job of introducing investing to beginners, but I thought that the entire book just revolved around one concept: Just invest in... Read morePublished 14 months ago by John
This book is very easy to read. Recommend for anyone trying to go their own with their investments. This is logically laid out and easy to understand. Read morePublished 16 months ago by Jmfv27
Classic work that ignores reality. Useless if you want to learn to make money.Published 18 months ago by ron