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Money managers under the microscope
from Global Investing:
Slow and steady wins the race: Malkiel
Investment guru Burton Malkiel, author of A Random Walk Down Wall Street, has revealed at a briefing that Chinese equities form the largest part of his personal satellite portfolio, although the core remains in low-cost index funds.
Malkiel, in town to beat the drum for Vanguard's index funds, argued that China will be the biggest economy in the world in 20 years' time, but most investors are underweight the emerging giant. "I'm a real expert on China - I've been there five times," he joked, but made the serious point that most investors have a home bias.
"In general, people are inadequately diversified," he said. "When people ask me how much international diversification they should have, I say: A lot more!" He conceded that asset class diversification had not been much help last year when markets collapsed in a great unwinding, but added that gold and US Treasuries had provided some relief.
Malkiel believes investors would do much better if they didn't try to time the market - because they invariably get it wrong.
