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1、 Page 3 A Random Walk Down Wall Street Including A Life-Cycle Guide To Personal Investing Burton G. Malkiel Chemical Bank Chairmans Professor of Economics At Princeton University Page 4 Copyright 1999, 1996, 1990, 1985, 1981, 1975, 1973 by W. W. Norton Let the Yield on Your Cash Reserve Keep Pace wi
2、th Inflation295 Money-Market Mutual Funds295 Money-Market Deposit Accounts297 Bank Certificates299 Tax-Exempt Money-Market Funds300 Exercise 5: Investigate a Promenade through Bond Country301 Zero-Coupon Bonds Can Generate Large Future Returns302 No-Load Bond Funds Are Appropriate Vehicles for Indiv
3、idual Investors303 Tax-Exempt Bonds Are Useful for High-Bracket Investors305 Hot TIPS: Inflation Indexed Bonds307 Should You Be a Bond-Market Junkie?309 Exercise 6: Begin Your Walk at Your Own Home; Renting Leads to Flabby Investment Muscles 310 Exercise 7: Beef Up with Real Estate Investment Trusts
4、313 Exercise 8: Tiptoe through the Investment Fields of Gold and Collectibles318 Exercise 9: Remember that Commission Costs Are Not Random Some Are Cheaper than Others 322 Exercise 10: Diversify Your Investment Steps324 A Final Checkup324 12. Handicapping the Financial Race: A Primer in Understandin
5、g and Projecting Returns from Stocks and Bonds 326 What Determines the Returns from Stocks and Bonds?326 Three Eras of Financial Market Returns331 Era I: The Age of Comfort333 Era II: The Age of Angst334 Era III: The Age of Exuberance340 The Age of the Millennium342 Appendix: Projecting Returns for
6、Individual Stocks347 13. A Life-Cycle Guide to Investing351 Four Asset Allocation Principles352 1. Risk and Reward Are Related352 2. Your Actual Risk in Stock and Bond Investing Depends on the Length of Time You Hold Your Investment 352 Page 12 3. Dollar-Cost Averaging Can Reduce the Risks of Invest
7、ing in Stocks and Bonds 356 4. The Risks You Can Afford to Take Depend on Your Total Financial Situation 360 Three Guidelines to Tailoring a Life-Cycle Investment Plan 362 1. Specific Needs Require Dedicated Specific Assets 363 2. Recognize Your Tolerance for Risk363 3. Persistent Savings in Regular
8、 Amounts, No Matter How Small, Pays Off367 The Life-Cycle Investment Guide368 14. Three Giant Steps Down Wall Street372 The No-Brainer Step: Investing in Index Funds373 The Index Fund Solution: A Summary375 A Broader Definition of Indexing 378 A Specific Index Fund Portfolio 382 The Tax-Managed Inde
9、x Fund 383 The Do-It-Yourself Step: Potentially Useful Stock-Picking Rules 386 The Substitute-Player Step: Hiring a Professional Wall-Street Walker391 Risk Level394 Unrealized Gains394 Expense Ratios395 The Morningstar Mutual-Fund Information Service395 A Primer on Mutual-Fund Costs398 Loading Fees3
10、99 Expense Charges399 Comparing Mutual-Fund Costs400 The Malkiel Step401 A Paradox405 Some Last Reflections on Our Walk406 A Random Walkers Address Book and Reference Guide to Mutual Funds409 Bibliography429 Index445 Page 13 PREFACE It has now been close to thirty years since I began writingthefirst
11、 edition of A Random Walk Down Wall Street. Themessage of theoriginal edition was a very simpleone: Investors would be far better offbuyingand holdingan index fundthan attempting to buy and sellindividual securities or actively managed mutual funds. I boldly stated that buyingand holdingallthestocks
12、 ina broad, stock-market averageas index funds dowas likelyto outperform professionally managed funds whose highexpense charges and large trading costs detract substantially from investmentreturns. Now, some thirty years later, I believe even more strongly inthat original thesis, and theres more tha
13、n a six-figure gainto prove it. Thechart on thefollowingpage makes thecase with great simplicity. It shows how an investor with $10,000 at thestart of 1969 would havefared investingina Standard Donald Peters of T. Rowe Price; Edward Mathias of TheCarlyle Group; Howard Baker of theAmerican Stock Exch
14、ange; Frank Wisneski and EdOwens of Wellington Management Company; H. Bradlee Perry of DavidL. Babson George Putnam of Putnam Funds; George S. Johnston of Scudder, Stevens Page 19 Roger Ford of Prudential Insurance; Robert Salomon, Jr., of Salomon Brothers; WilliamHelman and James Stoeffel of Smith
15、Barney; and George Smith of Baker, Fentress each provides a different perspective on thestock market. First ismyemployment at thestart of mycareer as a market professional with one of Wall Streets leading investmentfirms. It takes one, after all, to know one. In a sense, I remain a market profession
16、al inthat I currently chair theinvestmentcommittee of an insurance company that invests more than $250 billioninassets and siton the boards of several of thelargest investmentcompanies inthenation, which control a total of $400 billioninassets. Thisperspective has been indispensable to me. Some thin
17、gsinlifecan never fullybe appreciated or understood by a virgin. Thesame mightbe said of thestock market. Second ismycurrent position as an economist. Specializing insecurities markets and investmentbehavior, I have acquired detailed knowledge of academic research and findingson investmentopportunit
18、ies. I haverelied on many new research findingsinframingrecommendations for you. Last, and certainly not least, I havebeen a lifelonginvestor and successful participant inthemarket. How successful I willnot say, for itisa peculiarity of theacademic world that a professor isnot supposed to make money
19、. A professor may inheritlots of money, marry lots of money, and spend lots of money, butheor she isnever, never supposed to earn lots of money; its unacademic. Anyway, teachers are supposed to be “dedicated,“ or so politicians and administrators often sayespecially when tryingto justifythelow acade
20、mic pay scales. Academics are supposed to be seekers of knowledge, not of financial reward. It isintheformer sense, therefore, that I shall tellyou of myvictories on Wall Street. Page 26 Thisbook has a lot of facts and figures. Dont let that worry you. It isspecifically intended for thefinancial lay
21、person and offers practical, tested investmentadvice. You need noprior knowledge to follow it. Allyou need is theinterest and thedesire to haveyourinvestments work for you. Investing as a Way of Life Today At thispoint, its probably a good idea to explain what I mean by “investing“ and how I disting
22、uish thisactivity from “speculating.“ I view investingas a method of purchasing assets to gainprofit intheform of reasonably predictable income(dividends, interest, or rentals) and/or appreciation over the long term. It isthedefinition of the timeperiod for theinvestmentreturn and thepredictability
23、of thereturns that often distinguish an investmentfrom a speculation. An excellent analogy from thefirst Superman moviecomes to mind. When theevilLuthor bought land inArizona with theidea that California would soon slide into theocean, thereby quickly producing far more valuable beach-frontproperty,
24、 hewas speculating. Had hebought such landas a long-term holdingafter examining migration patterns, housing-construction trends, and theavailability of water supplies, hewould probably be regarded as investingparticularly ifheviewed thepurchase as likelyto produce a dependable future stream of cash
25、returns. Let memake itquite clear that thisisnot a book for speculators: I am not goingto promise you overnightriches. I am not promising you stock-market miracles as one best-sellingbook of the1990s claimed. Indeed, a subtitle for thisbook mightwellhavebeen The Get Rich Slowly but Surely Book. Reme
26、mber, just to stay even, your investments haveto produce a rate of return equal to inflation. Inflation intheUnited States and throughout most of thedeveloped world fellto the2 percent level inthelate 1990s, and some analysts believe that relative price stability willcontinue indefinitely. They sugg
27、est that inflationis theexception rather than theruleand that historical periods of rapid technological progress and peacetime economies were periods of Page 27 stable or even fallingprices. It may wellbe that littleor noinflationwilloccur during thefirst decades of thetwenty- first century, butI be
28、lieve investors should not dismiss thepossibility that inflationwillaccelerate again at some time inthefuture. We cannot assume that theEuropean economies willcontinue to havedouble-digitunemployment forever and that thedeep recessions inJapan and manyemergingmarkets willpersist. Moreover, as our ec
29、onomies become increasingly service oriented, productivity improvements willbe harder to come by. It stillwilltake four musiciansto play a string quartet and one surgeon to perform an appendectomy throughout thetwenty-first century, and ifmusicians and surgeons salaries rise over time, so willthecos
30、t of concert tickets and appendectomies. Thus, itwould be a mistake to thinkthat upward pressure on prices isnolonger a worry. If inflationwere to proceed at a 3 to 4 percent ratea rate much lower than we had inthe1970s and early 1980s theeffect on our purchasing power would stillbe devastating. The
31、followingtable shows what an average 4.8 percent inflationhas done over the1962-88 period. My morningnewspaper has risen 1,100 percent. My afternoon Hershey bar has risen even more, and its actually smaller than itwas in1962, when I was ingraduate school. If inflationcontinued at thesame rate, today
32、s morningpaper would cost more than one dollar by the The Bite ofInflation Compound Annual AverageAveragePercentageRate of 19621998IncreaseInflation Consumer price index30.20162.80439.14.8% Hershey bar$.05$.641,180.07.3 New York Times.05.601,100.07.1 First-class postage.04.32700.05.9 Gasoline (gallo
33、n).311.19283.93.8 Hamburger (McDonalds double) .28a 2.69860.76.5 Chevrolet (full size)2,529.0022,500.00789.76.3 Refrigerator freezer470.00750.0059.61.3 Source: For 1962prices, Forbes, Nov. 1, 1977, and various government and private sources for 1998prices. a1963data Page 28 year 2010. It isclear tha
34、t ifwe are to cope with even a mildinflation, we must undertake investmentstrategies that maintainour real purchasing power; otherwise, we are doomed to an ever-decreasing standard of living. Investing requires a lot of work, make nomistake about it. Romantic novels are replete with tales of great f
35、amily fortunes lost through neglect or lack of knowledge on how to care for money. Who can forget thesounds of the cherry orchard being cutdown inChekhovs great play? Free enterprise, not theMarxist system, caused the downfall of Chekhovs family: They had not worked to keep theirmoney. Even ifyou tr
36、ust allyourfunds to an investmentadviser or to a mutual fund, you stillhaveto know which adviser or which fundismost suitable to handle yourmoney. Armed with theinformation contained inthisbook, you should findita biteasier to make your investmentdecisions. Most important of all, however, isthefact
37、that investingisfun. Its funto pityourintellect against that of thevast investmentcommunity and to findyourself rewarded with an increase inassets. Its excitingto review your investmentreturns and to see how they are accumulating at a faster rate than yoursalary. Andits also stimulatingto learn abou
38、t new ideas for products and services, and innovations intheformsof financial investments. A successful investor isgenerally a well-rounded individual whoputs a natural curiosity and an intellectual interest to work to earn more money. Investing in Theory Allinvestmentreturnswhether from common stoc
39、ks or exceptional diamondsare dependent, to varying degrees, on future events. Thats what makes thefascination of investing: Its a gamblewhose success depends on an ability to predict thefuture. Traditionally, thepros intheinvestmentcommunity haveused one of two approaches to asset valuation: thefir
40、m-foundation theory or thecastle-in-the-airtheory. Millionsof dollars havebeen gained and lost on these theories. Toadd to thedrama, they appear to be mutuallyexclusive. An understanding of these two approaches isessential ifyou are to Page 29 make sensible investmentdecisions. It isalso a prerequis
41、ite for keeping you safe from serious blunders. Duringthe 1970s, a third theory, born inacademia and named thenew investment technology, became popular inthe Street.“ Later inthebook, I willdescribe that theory and its application to investmentanalysis. TheFirm-Foundation Theory Thefirm-foundation t
42、heory argues that each investmentinstrument, be ita common stock or a piece of real estate, has a firmanchor of something called intrinsic value, which can be determined by careful analysisof present conditions and future prospects. When market prices fallbelow (rise above) thisfirmfoundation of int
43、rinsicvalue, a buying(selling) opportunity arises, because thisfluctuation willeventually be correctedor so thetheory goes. Investing then becomes a dullbutstraightforward matter of comparing somethings actual price with its firm foundation of value. It isdifficultto ascribe to any one individual th
44、ecredit for originatingthefirm-foundation theory. S. EliotGuildis often given thisdistinction, buttheclassic development of thetechnique and particularly of thenuances associated with itwas worked outby John B. Williams. In The Theory of Investment Value, Williamspresented an actual formulafor deter
45、mining theintrinsicvalueof stock. Williamsbased hisapproach on dividend income. In a fiendishlyclever attempt to keep thingsfrom being simple, heintroduced theconcept of “discounting“ into theprocess. Discounting basically involves looking at incomebackwards. Rather than seeing how much money you wi
46、llhavenextyear (say $1.05 ifyou put$1 ina savingsbank at 5 percent interest), you look at money expected inthefuture and see how much less itiscurrently worth (thus, nextyears $1 isworth today onlyabout 95?, which could be invested at 5 percent to produce approximately $1 at that time). Williamsactu
47、ally was serious about this. He went on to argue that theintrinsicvalueof a stock was equal to the present (or discounted) valueof allits future dividends. Investors Page 30 were advised to “discount“ thevalueof moneys received later. Because so few people understood it, theterm caught on and “disco
48、unting“ now enjoys popular usage among investmentpeople. It received a further boost under theaegis of Professor IrvingFisher of Yale, a distinguished economist and investor. Thelogicof thefirm-foundation theory isquite respectable and can be illustrated best with common stocks. The theory stresses
49、that a stocks valueoughtto be based on thestream of earnings a firmwillbe able to distribute in thefuture intheform of dividends. It stands to reason that thegreater thepresent dividends and theirrate of increase, thegreater thevalueof thestock; thus, differences ingrowth rates are a major factor instock valuation. Now theslippery littlefactor of future expectations sneaks in. Security analysts must estimate not onlylong-term growth rates butalso how longan extraordinary growth can be maintained. When themarket gets overly enthusiastic about how far inthefutu