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Passive Investment Strategies and Efficient Markets
Author(s) -
Malkiel Burton G.
Publication year - 2003
Publication title -
european financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.311
H-Index - 64
eISSN - 1468-036X
pISSN - 1354-7798
DOI - 10.1111/1468-036x.00205
Subject(s) - investment (military) , passive management , investment strategy , financial market , efficient market hypothesis , business , financial economics , economics , investment management , monetary economics , institutional investor , finance , corporate governance , stock market , market liquidity , politics , political science , law , paleontology , horse , biology
This paper presents the case for and the evidence in favour of passive investment strategies and examines the major criticisms of the technique. I conclude that the evidence strongly supports passive investment management in all markets—small–capitalisation stocks as well as large–capitalisation equities, US markets as well as international markets, and bonds as well as stocks. Recent attacks on the efficient market hypothesis do not weaken the case for indexing.