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A Random Walk Down Wall Street
by Burton Malkiel
The academic foundation of passive investing, first published in 1973 and updated through the present day. Malkiel's central argument — that stock prices follow a random walk and cannot be consistently predicted — laid the intellectual groundwork for the index fund revolution before Vanguard even existed.
Key takeaways
- ★Stock prices incorporate all available information; consistently beating the market is near impossible
- ★Technical and fundamental analysis rarely outperform a simple buy-and-hold index strategy
- ★Diversification is the only free lunch in investing
- ★Time in the market is the most powerful variable; start as early as possible
- ★Most actively managed funds underperform their benchmark after fees over any long time horizon