Todd Capital Book Club is our way of sharing great books that we have read or are reading with our followers, club members and friends. The book for this week is A Random Walk Down Wall Street by Burton Malkiel. This book is great for the beginning investor because it starts at a low level and gradually builds up to more advanced concepts and strategies.
The main takeaway is that the best way to beat the market is to not even try to beat the market. The average stock market guru doesn’t beat the market and those that do tend to lack the ability to consistently beat it thereafter. Instead of stock picking and striving to beat that S&P, Malkiel advocates for index funds over the long term. His position is that index funds have consistently proven to be the best way to make money in the stock market and picking stocks is useless. I don’t know that I completely agree but this book made me have more respect for index funds which before this book I thought were a complete waste of time.
One thing that stands out to me about this book is it seems as though he touched on every single finance concept covered in my undergraduate education. Malkiel covered trading strategies, options, strategic valuation formulas, ratios etc. This book really allows you to walk away from it knowing that there is nothing hidden in the world of stock market investing that you haven’t been exposed to.
So for those who always ask us for book recommendations for first time investors, this is the book that we recommend.
– Todd Millionaire