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Burton Malkiel: 'I Am Not a Big Fan of ESG Investing'

The influential author and researcher shares his views on retirement income, asset allocation, equity valuations, whether indexing has gotten too big, and more.

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Our guest this week is Dr. Burton Malkiel. Dr. Malkiel is the Chemical Bank chairman's professor of economics at Princeton University. And he's also author of the widely influential investment book, "A Random Walk Down Wall Street." He's also the Chief Investment Officer at Wealthfront. He's a longtime professor in economics at Princeton, where he was also chairman of the economics department. Before that, he was the dean of the Yale School of Management, and William S. Beinecke Professor of Management Studies there from 1981 through 1988. Dr. Malkiel has served on boards of directors of several firms, including the Vanguard Group and on the investment committees of Active Investment Advisors, and the American Philosophical Society. Dr. Malkiel began his career in the investment banking department of Smith Barney & Co. He holds a BA and MBA degrees from Harvard and a PhD from Princeton University.

Bio and Background

Dr. Malkiel's bio 

Malkiel. B.G. 2020. “A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing” (Twelfth Edition).” (New York: W.W. Norton & Co.).

Dr. Malkiel’s WealthFront blog

Retirement Income

The 4% spending rule 

10-year Treasury yield

Asset Allocation

Riquier, A. 2020. "Investing legend Burton Malkiel on day-trading millennials, the end of the 60/40 portfolio and more.” MarketWatch. July 15, 2020.

Wealthfront portfolio construction methodology

Malkiel, B.G. 2015. “How Much Should We Invest in Emerging Markets?” WealthFront blog; April 14, 2015.

Equity Valuation

Cyclically adjusted price/earnings ratio 

Malkiel, B.G. 2020. “It’s a Good Time to Stock Up.” The Wall Street Journal; April 7, 2020

Finke, M. 2020. "The Remarkable Accuracy of CAPE as a Predictor of Returns.” Advisor Perspectives. July 20, 2020

Equity risk premium data; Damodaran Online

Global CAPE ratio data; Star Capital

Active/Passive

Morningstar Active/Passive Barometer 

Rekenthaler, J. 2018. "The Paradox of Skill.” Morningstar. Dec. 17, 2018.

Factor Investing

Goldman Sachs ActiveBeta US Large-cap Equity

Vanguard US Multifactor ETF

Risk Parity

WealthFront Risk Parity 

ESG

Kinder Morgan; Morningstar analysis

Kinder Morgan; Sustainalytics analysis 

Facebook; Morningstar analysis 

Facebook; Sustainalytics analysis