Talking the Walk With Burton Malkiel

"The problem is that we attempt to solve the simplest questions cleverly, thereby rendering them unusually complex. One should seek the simple solution."
-- Anton Chekhov

Eventually, every investing strategy that gains a following has to come up against Burton Malkiel.

Malkiel is the author of the landmark A Random Walk Down Wall Street, which contains the most assured route to long-term investing success yet discovered. Ironically, or perhaps as a result, the Princeton University professor's treatise is probably the most-reviled, oft-challenged philosophy on Wall Street.

The message of his book, first published in 1973, is simple: Investors are better off buying and holding an index fund than attempting to buy and sell individual stocks and actively managed funds. The market, according to Malkiel, prices stocks so efficiently that strategies designed to beat it are useless. As he puts it -- and this is where the Wall Street revulsion comes in -- "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 the experts." ...