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| Link | Quote | Stars | Tags | Author |
| 0368b94 | This toffee tastes like war or Lucifer's tears. This toffee is a molten pool of broken Christmas promises. If sadness had a flavor, it would be the contents of the Pyrex. | Jen Lancaster | ||
| 148ee85 | The story of sacred texts has always been the story of their readers: of shifting and often clashing interpretations. | Kwame Anthony Appiah | ||
| a6425d7 | has become increasingly clear to me that one's capacity for risk-bearing depends importantly upon one's age and ability to earn income from noninvestment sources. It | Burton G. Malkiel | ||
| a4291f8 | The index performance is not mediocre--it exceeds the results achieved by the typical active manager. | Burton G. Malkiel | ||
| f9fbad7 | Thus, purchasing a fund holding all the stocks in a broad-based index will produce a portfolio that can be expected to do as well as any managed by professional security analysts. | Burton G. Malkiel | ||
| 53f136c | Psychologists also remind us that investors are far more distressed by losses than they are delighted by gains. This leads people to discard their winners if they need cash and hold onto their losers because they don't want to recognize or admit that they made a mistake. Remember: Selling winners means paying capital gains taxes while selling losers can produce tax deductions. So if you need to sell, sell your losers. At least that way you .. | Burton G. Malkiel | ||
| 09ada90 | Here's why: Past performance is not a good predictor of future returns. What does predict investment performance are the fees charged by the investment manager. The higher the fees you pay for investment advice, the lower your investment return. As our friend Jack Bogle likes to say: In the investment business, "You get what you don't pay for." | Burton G. Malkiel | ||
| c5a068e | It is the definition of the time period for the investment return and the predictability of the returns that often distinguish an investment from a speculation. A speculator buys stocks hoping for a short-term gain over the next days or weeks. An investor buys stocks likely to produce a dependable future stream of cash returns and capital gains when measured over years or decades. | Burton G. Malkiel | ||
| fa2013c | Look for growth situations with low price-earnings multiples. If the growth takes place, there's often a double bonus--both the earnings and the multiple rise, producing large gains. Beware of very high multiple stocks in which future growth is already discounted. If growth doesn't materialize, losses are doubly heavy--both the earnings and the multiples drop. | Burton G. Malkiel | ||
| 22144ae | These very sad stories make all too clear the cardinal rule of investing: Broad diversification is essential. | Burton G. Malkiel | ||
| 05518ec | there are four factors that create irrational market behavior: overconfidence, biased judgments, herd mentality, and loss aversion. | Burton G. Malkiel | ||
| c8deb21 | ETFs tend to have very low expense ratios, and they can be more tax efficient than mutual funds because they are able to sell holdings without generating a taxable event. This could be an advantage for taxable investors. However, brokerage commissions are charged on the purchase of ETFs, and for small and moderate purchases these commissions can overwhelm those other advantages. No-load indexed mutual funds typically have no purchase fees. .. | Burton G. Malkiel | ||
| 60e565e | What is a cynic? A man who knows the price of everything, and the value of nothing. -- Oscar Wilde, Lady Windermere's Fan | Burton G. Malkiel | ||
| d6e5c12 | Rebalancing will not always increase returns. But it will always reduce the riskiness of the portfolio and it will always ensure that your actual allocation stays consistent with the right allocation for your needs and temperament. | Burton G. Malkiel | ||
| f5bfb0d | In David Copperfield, Charles Dickens's character Wilkins Micawber pronounced a now-famous law: Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. | Burton G. Malkiel | ||
| cf65b32 | Avoiding serious trouble, particularly troubles that come from incurring unnecessary risks, is one of the great secrets to investment success. Investors all too often beat themselves by making serious--and completely unnecessary--investment mistakes. In | Burton G. Malkiel | ||
| 64fc7b6 | There is no simple road to riches for you and your family. The secret to getting wealthy is that there is no secret. The only way to get rich--unless you inherit or marry a fortune or hit the lottery--is to get rich slowly. Start early and contribute as much as possible to your savings for as long as possible. | Burton G. Malkiel | ||
| 1bb7ac4 | A stock selling at $100 per share with earnings of $10 per share would have the same P/E multiple (10) as a stock selling at $40 with earnings of $4 per share. It is the P/E multiple, not the price, that really tells you how a stock is valued in the market. | Burton G. Malkiel | ||
| 2ae8ac1 | The secret to success and enjoyment in so many parts of life is to know your capabilities and stay within them. Similarly, the key to success in investing is to know yourself and invest within your investing capabilities and within your emotional capacities. | Burton G. Malkiel | ||
| 9e8fc5b | The largest, longest study of experts' economic forecasts was performed by Philip Tetlock, a professor at the Haas Business School of the University of California-Berkeley. He studied 82,000 predictions over 25 years by 300 selected experts. Tetlock concludes that expert predictions barely beat random guesses. Ironically, the more famous the expert, the less accurate his or her predictions tended to be. | Burton G. Malkiel | ||
| 168d187 | As the economic historian Charles Kindleberger has stated, "There is nothing so disturbing to one's well-being and judgment as to see a friend get rich." | Burton G. Malkiel | ||
| 0394431 | You are also allowed to "Roth and Roll." You can roll the balance of your traditional IRA into a Roth, again if your income level qualifies.* You need to pay tax on the amount converted, but from then on neither the earnings nor the withdrawals in retirement are taxed. Moreover, you are not required to take the money out at retirement, and contributions can continue to be made into your seventies and eighties if you wish. Thus, significant .. | Burton G. Malkiel | ||
| f77907b | The best choice for your equity investments is a fund indexed to the total world stock market. If you are truly uncomfortable investing in "foreign" stocks, you could choose a domestic total stock market fund. We recommend that you be diversified internationally because the United States represents less than half of the world's economic activity and stock market capitalization. For your bonds, choose a total U.S. bond market index fund." | Burton G. Malkiel | ||
| 8ff6b47 | As an investor, you have one powerful way to keep from getting distressed by devilish Mr. Market: Ignore him. Just buy and hold one of the broad-based index funds that | Burton G. Malkiel | ||
| 4bb827f | Of all the professional money managers, Warren Buffett's record stands out as the most extraordinary. For over 40 years, Buffett's company, Berkshire Hathaway, has earned a rate of return for his stockholders twice as large as the stock market as a whole. But that record was not achieved only by his ability to purchase "undervalued" stocks, as it is often portrayed in the press. Buffett buys companies and holds them. (He has suggested that .. | Burton G. Malkiel | ||
| c380f22 | A major advantage of indexing is that index funds are tax efficient. Actively managed funds can create large tax liabilities if you hold them outside your tax-advantaged retirement plans. To the extent that your funds generate capital gains from their portfolio turnover, this active trading creates taxable income for you. And short-term capital gains are taxed at ordinary income tax rates that can go well over 50 percent when state income t.. | Burton G. Malkiel | ||
| 772400d | With no-load index funds, no transaction fees are levied on contributions. Moreover, mutual funds will automatically reinvest all dividends back into the fund whereas additional transactions could be required to reinvest ETF dividends. We recommend that individuals making periodic contributions to a retirement plan use low-cost indexed mutual funds rather than ETFs. | Burton G. Malkiel | ||
| 986f2e5 | The first concerns how an investor should choose among different types of broad-based index funds. The best-known of the broad stock market mutual funds and ETFs in the United States track the S&P 500 index of the largest stocks. We prefer using a broader index that includes more smaller-company stocks, such as the Russell 3000 index or the Dow-Wilshire 5000 index. Funds that track these broader indexes are often referred to as "total stock.. | Burton G. Malkiel | ||
| 1069cd1 | October. This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August and February. --Mark Twain, Pudd'nhead Wilson | Burton G. Malkiel | ||
| 8a5fa3b | Diversify across securities, across asset classes, across markets--and across time. | Burton G. Malkiel | ||
| 768ae62 | As an investor, what should you do about forecasts--forecasts of the stock market, forecasts of interest rates, forecasts of the economy? Answer: Nothing. You can save time, anxiety, and money by ignoring all market forecasts. | Burton G. Malkiel | ||
| 1f4bef6 | Just as contagious euphoria leads investors to take greater and greater risks, the same self-destructive behavior leads many investors to throw in the towel and sell out near the market's bottom when pessimism is rampant and seems most convincing. One of the most important lessons you can learn about investing is to avoid following the herd and getting caught up in market-based overconfidence or discouragement. Beware of "Mr. Market." | Burton G. Malkiel | ||
| da54fcd | Note also that during the punishing bear market of 2007-2008, new record withdrawals were made by investors who threw in the towel and sold their mutual fund shares--at record lows--just before the first, and often best, part of a market recovery. | Burton G. Malkiel | ||
| 3c1c46e | Indeed, when pessimism is rampant and market prices are down is the worst time to sell out or to stop making regular investment contributions. The time to buy is when stocks are on sale. | Burton G. Malkiel | ||
| f8149c5 | You don't care if it's cold and raining or warm and sunny 10,000 miles away because it's not your weather. The same detachment should apply to your 401(k) investments until you approach retirement. Even | Burton G. Malkiel | ||
| 1c17e0c | The stock market as a whole has delivered an average rate of return of about 9 1/2 percent over long periods of time. But that return only measures what a buy-and-hold investor would earn by putting money in at the start of the period and keeping her money invested through thick and thin. In | Burton G. Malkiel | ||
| 728421d | The right response to a fall in the price of one asset class is never to panic and sell out. Rather, you need the long-term discipline and personal fortitude to buy more. Remember: The lower stock prices go, the better the bargains if you are truly a long-term investor. Sharp market declines may make rebalancing appear a frustrating "way to lose even more money." But in the long run, investors who rebalance their portfolios in a disciplined.. | Burton G. Malkiel | ||
| 47023ed | There are few, if any, absolute rules in saving and investing, but here's ours: Never, never, never take on credit card debt. This rule comes as close as any to being an inviolable commandment. Scott | Burton G. Malkiel | ||
| 886b942 | The secret of getting rich slowly but surely is the miracle of compound interest. Albert Einstein is said to have described compound interest as the most powerful force in the universe. The concept simply involves earning a return not only on your original savings but also on the accumulated interest that you have earned on your past investment of your savings. | Burton G. Malkiel | ||
| ad03cd7 | Benjamin Franklin provides us with an actual rather than a hypothetical case. When Franklin died in 1790, he left a gift of $5,000 to each of his two favorite cities, Boston and Philadelphia. He stipulated that the money was to be invested and could be paid out at two specific dates, the first 100 years and the second 200 years after the date of the gift. After 100 years, each city was allowed to withdraw $500,000 for public works projects... | Burton G. Malkiel | ||
| 4f22f9a | By buying a share in a "total market" index fund, you acquire an ownership share in all the major businesses in the economy. Index funds eliminate the anxiety and expense of trying to predict which individual stocks, bonds, or mutual funds will beat the market." | Burton G. Malkiel | ||
| aa57d06 | This simple investment strategy--indexing--has outperformed all but a handful of the thousands of equity and bond funds that are sold to the public. But you wouldn't know this when Wall Street throws everything but the kitchen sink at you to convince you otherwise. This is the plan we use ourselves for our retirement funds, and this is the plan we urge you to follow, too. | Burton G. Malkiel | ||
| 0e876ab | We have believed for many years that investors will be much better off bowing to the wisdom of the market and investing in low-cost, broad-based index funds, which simply buy and hold all the stocks in the market as a whole. As more and more evidence accumulates, we have become more convinced than ever of the effectiveness of index funds. Over 10-year periods, broad stock market index funds have regularly outperformed two-thirds or more of .. | Burton G. Malkiel | ||
| fa0a58c | The average actively managed mutual fund charges about one percentage point of assets each year for managing the portfolio. It is the expenses charged by professional "active" managers that drag their return well below that of the market as a whole. Low-cost index funds charge only one-tenth as much for portfolio management. Index funds do not need to hire highly paid security analysts to travel around the world in a vain attempt to find "u.. | Burton G. Malkiel |