The SQUEEZE: Adopting popular investing techniques is a challenge because the markets dictate whether an asset will perform according to assumption or produce inferior results. It is within this context that Burton G. Malkiel discusses the significant flaws in two major investing techniques: technical analysis and fundamental analysis. Malkiel’s book, A Random Walk Down Wall Street, challenges the notion that the use of popular techniques always contributes to the outperformance of market averages. Malkiel likens asset prices to “random walk,” supporting the “efficient market hypothesis,” which means that the financial market is “informationally efficient.” In the book, Malkiel offers strategies for both the novice and seasoned investor and cites studies regarding the past performance of major asset classes. Malkiel’s A Random Walk Down Wall Street is a must-read for long-term mutual fund investors.

Notable Endorsement: “A classic, I know, but this preview is all about selling books and this one's already done more than a million copies... this has got to be the leading book in its field." The Bookseller "This revised new edition of the million-copy bestseller is updated with a new chapter on behavioural finance, and remains one of the best investment guides on the market... a must for students of economics.” –Publishing News

Common Q’s Answered by this Book:

• What is the random walk hypothesis?
• What is the efficient market hypothesis?
• What is technical analysis?
• What is fundamental analysis?
• What are some methods for selecting managed mutual funds?
• How are underperforming assets rated?

About the Author: Burton G. Malkiel is a Princeton economist. Malkiel is the Chemical Bank Chairman’s Professor of Economics at the university. He served as a member of the Council of Economic Advisers (1975-1977); and on several boards of multiple corporations and organizations. Malkiel served as the president of the American Finance Association in 1978 and as the dean of the Yale School of Management from 1981 to 1988. As a writer, Malkiel has written on finance topics, arguing and supporting the “efficient market hypothesis,” which centers on the idea that the prices of publicly-traded assets represent “publicly available information.” Malkiel has written such titles as The Term Structure of Interest Rates: Expectations and Behavior Patterns (1966); and Strategies and Rational Decisions in the Securities Options Market (1969). Today, Malkiel serves as the chief investment officer of Wealthfront, Inc. Malkiel graduated with a bachelor’s and an MBA degree from Harvard University. For more information, visit: http://en.wikipedia.org/wiki/Burton_Malkiel. For more information about the efficient market hypothesis, review: http://en.wikipedia.org/wiki/Efficient-market_hypothesis.

Book Vitals:

Publisher: W. W. Norton & Company (December 2007)