Burton G. Malkiel
Forget trying to time the market or pick winning stocks. A simple, low-cost index fund strategy historically outperforms the vast majority of highly paid Wall Street professionals over the long run.
Investors traditionally value assets through either the firm-foundation theory, which estimates intrinsic value based on future cash flows, or the castle-in-the-air theory, which relies on predicting mass psychology.
Both technical analysis, which studies past price charts, and fundamental analysis, which evaluates company financials, struggle to consistently generate above-average returns due to market efficiency and unpredictable random events.
Low-cost, broad-based index funds generally yield better long-term results than actively managed funds by eliminating expensive management fees and reducing excessive trading costs.