[patio11]

Nobody ever wants to hear this, but I have to say it anyhow: read A Random Walk Down Wallstreet, give up, and invest in index funds.

[mechanical_fish]

I'll see your Malkiel and raise you a Bernstein:

http://www.amazon.com/Four-Pillars-Investing-Building-Portfo...

The conclusion remains the same, however. Oh, how terribly dull it all is when compared to a nice game of craps.

[Retailslave]

I hope this is not "above me" I don't know as much as the average hacker would probably know about markets. I'm 20 and don't have THAT much knowledge.

>>give up, and invest in index funds. Alright, Any book recommendations for that?

[patio11]

It is not a commentary on you, but rather on markets. On average, investor performance is market average minus expenses, and this holds regardless of investor sophistication.

[btilly]

Actually my understanding is that investor performance is usually better than the market average, but not by enough to meet expenses. Therefore after market returns usually lose. Markets are not perfect. But the imperfections are small.

There was a study I saw a decade ago about whether any funds produced better results than chance. Due to the difficulty of modeling the possibilities, only mutual funds were considered. So people like George Soros did not get counted. In the end 2 names had performed high enough that, with 95% confidence, their performance was not by chance. Their names were Peter Lynch and Warren Buffett. Peter Lynch retired before he got to the 99% confidence.

Interestingly both Peter Lynch and Warren Buffett recommend low cost index funds for average investors.

[adrianscott]

0% return over 5-10 years is the best you can do?... and even if you accept the conclusion, then of course there is the question of which index ;)

[adrianscott]

malkiel's work is based on flawed assumptions which lead to flawed conclusions -- i recommend reviewing those before spending time on his book.

[HockeyPlayer]

details and a link to the flaws please...