Tom MacWright

I read A Random Walk Down Wall Street by Burton Malkiel on


A Random Walk is a classic of traditional finance writing: it’s practically a bible to communities like the Bogleheads and its fame has put Burton Malkiel on the board of many companies, most recently Wealthfront.

It’s pretty darn good. The explanation of diversification is the best I’ve read, carefully balancing accuracy and simplicity to make it understandable. The general approach to investing deserves the label “common sense,” and the tales of woe from the stock market are entertaining.

I read the twelfth edition: published in January of 2020, published 47 years after the first edition. And it has been updated quite well over the years – it no longer recommends even ‘good’ active managers, it refers to ETFs and updates its references to stock market crashes. It isn’t too hip, and doesn’t try to discuss Robinhood investing or crypto scams investments.

Like a lot of investment advice, it’s heavily tilted toward tax-sheltered assets - recommending REITs, for example, only seems to make sense if you’re protected from their severe tax consequences. And, while it tracked to January of this year, the rest of 2020 has been a gut-punch, and Malkiel has gone on the record recommending significantly more unusual strategies to deal with our potentially-permanently-worse reality, including buying preferred stock.

I’d recommend it. Though if you’re just getting started and are primarily interested in what to do - rather than about learning theory and history - the Bogleheads wiki is a really great place to start.