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Malkiel’s stock recommendation: 82% top 50 US and 18% top 50 international

Posted by John Reed on

Here is my new and improved ultra precise answer to your question of which index fund readers should put their money in.
82% in XLG and 18% in FEZ.
This is my implementation of Burton Malkiel’s very strong admonition on page 202 of the 50th anniversary hardcover edition of A Random Walk Down Wall Street.
He writes in pretty plain English, but I will translate it one more level into plainer English,
You’re nuts if your stock market investments do not match this.
If Peter Lynch and Warren Buffett were to read this, I suspect they would say, “close enough” to their admonitions to put your money in index funds.
So this is Malkiel, not me. It is Lynch and Buffett not me. I am not interested in arguing with anyone whose ego is entangled in which stocks or mutual funds he owns.
I see no reason to do further research until some new research refutes this Malkiel advice. Plus, it is generally impossible to create a better system for choosing WHICH stocks to buy or sell and WHEN because if everyone follows the same system of stock picking or timing, it stops working.
The 82% XLG 18% FEZ formula makes no attempt to pick stocks other than by market cap and continent and no attempt to time the market, both quite thoroughly proven to be futile.

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