BURTON G. MALKIEL is the Chemical BankChairman's Professor of Economics Emeritus at Princeton University and the author of the bestselling A Random Walk Down Wall Street. Malkiel has served on the President's Council of Economic Advisers, as dean of the Yale School of Management, as chair of Princeton's Economics Department, and as a director of major corporations. He is currently the Chief Investment Officer of Wealthfront. CHARLES D. ELLIS is a consultant to large public and private institutional investors. For three decades, he was managing partner of Greenwich Associates, the international business strategy consulting firm. He has taught investing at both Harvard and Yale and is the author of seventeen books, including the bestselling Winning the Loser's Game.
Preface to Anniversary Edition xi
Foreword to Original Edition xv
Foreword to the Anniversary Edition xix
Introduction xxi
It All Starts with Saving 1
I. Save 3
First Do No Harm 5
Start Saving Early: Time is Money 6
The Amazing Rule of 72 7
Savvy Savings 11
Small Savings Tips 14
Big Ways to Save 15
Let the Government Help You Save 17
Own Your Home 18
How Do I Catch Up? 19
II. Index 23
Nobody Knows More Than the Market 24
The Index Fund Solution 27
Don't Some Beat the Market? 29
Index Bonds 33
Index Internationally 34
Index Funds Have Big Advantages 36
One Warning 37
Confession 39
III. Diversify 41
Diversify Across Asset Classes 43
Diversify Across Markets 46
Diversify Over Time 47
Rebalance 51
IV. Avoid Blunders 57
Overconfidence 59
Beware of Mr. Market 61
The Penalty of Timing 65
More Mistakes 66
Minimize Costs 67
V. Keep It Simple 71
Review of Basic Rules 72
Asset Allocation 79
Asset Allocation Ranges 81
Investing in Retirement 85
Getting Specific 86
VI. Timeless Lessons for Troubled Times 95
Volatility and Dollar-Cost Averaging 97
Diversification is Still a Time-Honored Strategy to Reduce Risk 99
Rebalancing 101
Diversification and Rebalancing Together 103
Index at Least the Core of Your Portfolio 104
Fine-Tuning a Bond Diversification Strategy 107
A Final Thought 111
A Super Simple Summary: KISS Investing 113
Appendix: Save on Taxes Legally 115
Individual Retirement Accounts (IRAs) 115
Roth IRAs 117
Pension Plans 118
Tax-Advantaged Saving for Education 120
Recommended Reading 123
Acknowledgments 125
About the Authors 127
Index 129
