Since the height of the financial crisis the buy-and-hold crowd has been on the defensive.  Now Burton Malkiel, author of A Random Walk Down Wall Street, is coming to its defense.  Malkiel notes the benefits of portfolio diversification, the low costs of indexing and portfolio re-balancing.  He documents one such strategy would have worked over the past decade.  One thing he doesn’t do is note the psychological challenges in following this type of strategy.  In an interview Malkiel plays down the downside of ETFs.  He notes how ETFs serve the indexer well by lowering their costs.  In today’s screencast we highlight some time-tested rules from one of the original EMH proponents.

Items mentioned in the above screencast:

On the benefits of diversification, low costs and portfolio re-balancing. (WSJ)

The buy-and-hold crowd is back.  (Abnormal Returns)

Buy-and-hold the best of a bad lot? (Abnormal Returns)

Why Burton Malkiel “loves” ETFs.  (IndexUniverse)