50 Years Later, Burton Malkiel Hasn’t Changed His Views on Indexing

 Burton Malkiel, the author of the classic book A Random Walk Down Wall Street still believes that individual investors can't "beat" the stock market. 

Writing for The Wall Street Journal, Daniel Akst:

'FIFTY years ago this January, an economist named Burton Malkiel published a book calling for an innovation on behalf of the small investor. “What we need,” he wrote, “is a no-load, minimum-management-fee mutual fund that simply buys the hundreds of stocks making up the broad stock-market averages and does no trading from security to security in an attempt to catch the winners.”'

"Dr. Malkiel, 90 years old, still says index investing beats other approaches, and he has half a century of additional data to bolster his case, which he does in a 50th anniversary edition of the book to be published in January. By now an investing classic, “A Random Walk Down Wall Street” has been updated to cover the many financial innovations (from exchange-traded funds to Ethereum) since it was first published. The book retains its author’s trademark blend of erudition and wit—and his insistence that markets really are efficient." 

DR. MALKIEL:  "Each year about two-thirds of active managers underperform the index, and those who outperform in one year are not the same as those who outperform in the next. S&P does something called Spiva, in which they compare the S&P indexes with active managers. And what it shows is that over a 10-year period, roughly 90% of domestic stock funds, for example, are outperformed by the index." (S&P: Standard and Poor's)

WSJ: You advocate indexing, dollar-cost averaging and diversification, and you make mincemeat of such practices as technical analysis, ESG and “smart beta.” You see cryptocurrencies as too risky.