Malkiel: Buy Stocks, not Bonds


David S Meyers CFP

My blog entry about this:

Burton Malkiel has been speaking up a lot lately, and with much the
same message – repeated several times over the last few months (at
least since an op-ed back in April).  While hitting on some of the same
themes he’s hit on for 40 years (index funds, low costs, broad
diversification, don’t time the market, don’t overpay for active
management), he’s been focusing lately on the state of the bond market.

In today's WSJ, in an op-ed piece, he again makes the case for equities
instead of bonds, for low-cost index funds, and talks about how the
market properly handled the recent Knight Capital trading disaster.

The WSJ op-ed piece itself:

And the first paragragh of the WSJ piece:
The stock market continues to reflect the very modest economic recovery
now under way in the United States. From January 2011 through
mid-August 2012, the S&P 500 has produced moderate single-digit total
returns. But many individual investors are not participating. Some $200
billion has flowed out of equity mutual funds since January 2011. Even
more has flowed into bond funds, leading bond king Bill Gross to
proclaim “the cult of equity is dying.†Yet I believe that investors
who pull their money out of the stock market today to invest in bonds
are making a huge mistake.

David S. Meyers, CFP®
disclaimer: discussions in are for
educational purposes only and should not be construed as financial
advice. For personal financial advice, please consult directly with a


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