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Indexing Is Still the Best Bet for Investors
  + stars: | 2023-09-14 | by ( Burton G. Malkiel | ) www.wsj.com   time to read: 1 min
Journal Editorial Report: The week's best and worst from Kim Strassel, Kyle Peterson and Dan Henninger. Images: Zuma Press/EPA/Shutterstock Composite: Mark KellyActive portfolio managers claim that agile stock picking is the best way to invest. Many have lately argued that simple indexing is a bad strategy in today’s environment because the stock market is dangerously “narrow.” Seven stocks—Alphabet, Amazon , Apple , Meta , Microsoft , Nvidia and Tesla—constitute close to 20% of the S&P 500’s value and have been responsible for almost 90% of the index’s gains this year. Now these “Magnificent Seven” are beginning to falter. The simple index investor, the active managers warn, will soon be overly concentrated in a small number of stocks that are overpriced and have been hyped by the promise of artificial intelligence.
Persons: Kim Strassel, Kyle Peterson, Dan Henninger, Kelly Organizations: Zuma Press, Apple, Meta, Microsoft, Nvidia, Tesla
You recommended index funds 50 years ago even before index funds existed. Standard & Poor's publishes annual reports showing how actively managed funds compare with index funds. Random Walk means that the history of past stock market prices cannot be used to predict the future. Exchange Traded Funds (ETFs), most of which are tied to index funds, are continuing to rake in money. This suggests that returns over the next decade are likely to be below the 9%-10% long-run historical stock market returns.
Another popular choice among real estate investors specifically is "Rich Dad Poor Dad." It was Ramit Sethi's popular money book that taught them how to be more intentional when it came to spending. Real estate"Retire on Real Estate" by Kai AndersonAvery Heilbron, who achieved financial freedom before 30 partly thanks to his investment properties, says that "Retire on Real Estate" is what nudged him in the direction of buying property to build wealth. Courtesy of Avery HeilbronIf you want to build long-term wealth, "I think real estate is 100% the best thing," Heilbron said. "Rich Dad Poor Dad" by Robert KiyosakiThis classic by Robert Kiyosaki is a favorite among real estate investors and early retirees, including Mike Zuber, who was able to quit his day job in his 40s thanks to his lucrative real estate portfolio.
Don’t Give Up on the Stock Market
  + stars: | 2022-09-22 | by ( Burton G. Malkiel | ) www.wsj.com   time to read: +1 min
Don’t be fooled by falling oil prices; inflation has proved stubbornly sticky. Healthcare and shelter costs are rising, and core inflation (excluding food and energy) remains high. Population growth has moderated and the U.S. is aging rapidly, suggesting that labor shortages could put pressure on growth and inflation. Rising protectionism, an antipathy to immigration and the balkanization of supply chains will only exacerbate trends toward stagflation. The Goldilocks economy could easily morph into a 1970s-style combination of persistent inflation and unsatisfactory growth.
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