“Nothing is guaranteed” should be the motto of A Random Walk Down Wall Street by Burton G. Malkiel. Don’t let this motto scare you though; the book does a fantastic job giving newbies to investing the basic knowledge to get into the game. I came away from reading the book feeling like I am already making some very smart decisions about my 401(k), but I also found places where the book helped fill in gaps in my knowledge. I now have a list of “I should be doings” even if I haven’t put them in place yet. Nevertheless, for every piece of advice that the author provides, there is a tale of woe.
The author is very careful to remind readers that success is as much about smart decisions as it is about luck. No number of charts can fully identify where the next big breakthrough is coming. Instead, playing the stock market appears to a tale of slow and steady, not a sprint. Remember, past performance is not indicative of future performance. Initial Price Offerings (IPOs) on the stock market may be initially influenced by fancy names and buzz, but it’s the prudent investors, fully aware of how much risk they can afford to take on, who are able to make the stock market work. Malkiel strips away all of the mystery of the Wall Street suits to make it easier for the everyday saver/future planner to not get caught up in “next new thing” and instead feel comfortable with stable choices, like a diverse portfolio.
Now this book doesn’t go into the nitty gritty details of how Wall Street came to be—Hamilton fans, fair warning, this isn’t a love letter to the credit that Hamilton and Adams gave to the United States, but it does go in-depth into some of the financial sector's best known events including Dutch tulip mania, the Great Depression, and the United State’s recent housing bubble and recession. These historical discussions add yet another layer to my basic understanding of GDP, inflation, and other economic terms that have driven history. More so, the book made me feels excited about topics that I, at times, find to be very dry and too number-heavy.
Overall, I found a good balance between statistical and anecdotal evidence; Malkiel’s easy-to-understand explanations make even the least financially informed feel like they are catching on. I’m sure that I’ll reference this book further as I start to heed some of the book’s advice in order to build a more financially stable future.