The Elements of Investing. Burton G. Malkiel. Читать онлайн. Newlib. NEWLIB.NET

Автор: Burton G. Malkiel
Издательство: John Wiley & Sons Limited
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Жанр произведения: Личные финансы
Год издания: 0
isbn: 9781119773788
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approach should be balanced and the investments should be broadly diversified. Most importantly, the authors stress that the investments must be low cost. One certainty about investing is that, for a given return, the more you spend to earn it, the less of it you will keep. The authors conclude that the best way to implement your plan is to invest in low‐cost index funds.

      Like blocking and tackling, this approach is certainly not sexy. But, I daresay that most investors would be better off if they followed this strategy. Indeed, it's the kind of approach that we espoused at Vanguard and it has served many clients very well over the years.

      The Elements of Investing is a must‐read for all investors—those new to investing and those who have been at it for a while. It's for people of all ages. It should be required reading in high school because the power of compounding is particularly valuable when investors start at a young age. But veteran investors will also benefit from reading this book because it debunks misconceptions and identifies behavioral biases that stand in the way of successful investing. And, just to make sure you do not fall prey to the siren's song of a better way, you should reread this book every several years.

      Over the course of my career, I've seen time and again how the principles discussed in this book have helped ordinary people achieve extraordinary results.

      George U. “Gus” Sauter

      Retired Chief Investment Officer, Vanguard

      July 2019

      In The Elements of Investing, Charley Ellis and Burt Malkiel, two of the investment world's greatest thinkers, combine their talents to produce a remarkable guide to personal finance. Having already written two of the finest books on financial markets, Ellis's Winning the Loser's Game and Malkiel's A Random Walk Down Wall Street, why should the authors revisit the subject of their already classic volumes? The sad fact is that in the cacophony of advice for individual investors, few sane voices are raised. In writing The Elements of Investing, the authors provide an important service to the lay reader, honing their message to the bare essentials by heeding Albert Einstein's dictum that “everything should be made as simple as possible, but not simpler.”

      Investors have three tools to deploy in the portfolio management process—asset allocation, market timing, and security selection. Asset allocation involves setting long‐term targets for each of the asset classes in which an investor invests. Market timing consists of short‐term bets against the long‐term asset allocation targets. Security selection deals with the construction of the asset classes that an investor chooses to employ.

      Ellis and Malkiel observe that investors consistently make perverse market timing decisions, chasing hot performers and dumping laggards. Study after study of mutual fund trading concludes that investors buy high and sell low, subtracting value with their timing decisions. Ellis and Malkiel sensibly advise investors to adopt a coherent long‐term strategy and stick with it.

      Of course, even in a slim volume, quibbles arise. I view home ownership more as a consumption good and less as an investment asset. I cast a skeptical eye on Ellis and Malkiel's implicit endorsement of stock picking in their confessions regarding personal success in security selection. (Is it surprising that two of the greatest figures in modern finance would figure out how to beat the market? Yes, they can pick stocks—the rest of us cannot.) I more emphatically recommend Vanguard, which, along with TIAA‐CREF, operates on a not‐for‐profit basis and thereby eliminates the money management industry's pervasive conflict between profit motive and fiduciary responsibility. Quibbles aside, The Elements of Investing delivers an important and fundamentally valuable message.

      David F. Swensen

      Author of Unconventional Success: A Fundamental Approach to Personal Investment

      Chief Investment Officer, Yale University

      July 2009

      Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty. –Theodore Roosevelt, 1910

      A common misperception is that successful investing requires a ton of money, a complicated portfolio, or a detailed understanding of where the markets are headed next. The truth is, sometimes the simplest approach is the toughest to beat. Charley Ellis and Burt Malkiel do a masterful job in Elements of Investing of laying out clear, simple rules that any investor can follow to grow their wealth over time.

      Here's the catch: Just because something is simple doesn't mean it's easy. Anyone who's tried to adopt a New Year's resolution to eat healthier or exercise knows what I mean. Day 1 is full of optimism. By Day 7, the initial thrill may have worn off. By Day 30, most of us have reverted back to old habits.