Princeton University (and author of best-selling author of A Random Walk down Wall Street) Burton Malkiel was in Paris where he gave a speech on investments, stocks, bonds and asset allocation. Burton is more than ever an advocate of the efficiency of financial markets. He gave a word of caution though: He said that we have entered a world of single-digit rates. In other words, the good old days are behind us and investors should not expect an equity risk premium as fat as it used to be, as fat as MBA students are usually taught. There are a host of reasons why stocks may no longer outperform bonds the way they used to. We'll go over them in a later post. In the meantime I urge you to read Burton Malkiel's latest edition of the Random Walk. This is genuine Malkiel, informative, well-taken and fun to read!
Don't worry though, stocks are still good to your health!!!