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An Index-Fund Evangelist Is Straying From His Gospel

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  • An Index-Fund Evangelist Is Straying From His Gospel

    "In his classic 1973 book “A Random Walk Down Wall Street,” Burton Malkiel, a Princeton economics professor, made an assertion that was startling at the time: that “a blindfolded monkey throwing darts at the stock listings could select a portfolio that would do just as well as one selected by the experts.”

    Three years later, Vanguard, the asset manager where Mr. Malkiel served on the board for 27 years, started the first passive index fund, an innovation that has swept the financial world.

    Now, at age 84, Mr. Malkiel has had a remarkable change of heart: Maybe the experts can beat the monkeys after all. That is, if the experts are software engineers writing sophisticated algorithms for computer-generated trading."

  • #2
    Malkiel has had a lot of interesting recommendations in the last few years. I try not to get too dogmatic about anything investing related. There are many roads to Dublin.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011


    • #3
      I think dogma is generally counter-productive to any situation, especially one which lends itself so well to analytics like anything financial. Obv it's going to be possible for experts to beat bro-investing to some extent. Basically what they're saying is instead of charging 1.5% to beat the index by 1.5%, they can charge you 0.3% to beat the index by 1% by doing their smart-β, low P/E thing.

      Wealthfront likes high-dividend, is its tax drag? I haven't meddled with it.