Michel Pireu Columnist

“It is clear that the ability to beat the average consistently is extremely rare,” says Burton Malkiel in A Random Walk down Wall Street. “Neither fundamental analysis of a stock’s firm foundation of value nor technical analysis of the market’s propensity for building castles in the air can produce reliably superior results. Even the pros must hide their heads in shame when they compare their results with those obtained by the dartboard method of picking stocks. “Sensible investment policies for individuals must then be developed in two steps. First it is crucially important to understand the risk-return trade-offs that are available and to tailor your choice of securities to your temperament and requirements … assuming reasonably efficient markets. The indexing strategy is the one I most highly recommend. At least the core of every investment portfolio ought to be indexed.” I recognise, however, that telling most investors that there is no hope of beating the averages is like telli...

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