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12. Efficient Portfolio Management: Modern portfolio theory (MPT) is explained, suggesting that investors should optimize portfolios based on risk and return. Malkiel emphasizes investing in a mix of asset classes to maximize returns for a given level of risk. 13. Dollar-Cost Averaging: Malkiel supports dollar-cost averaging—investing a fixed amount at regular intervals—because it minimizes the impact of market volatility and takes the emotion out of investing. 14. Avoiding Stock Picking: Individual stock picking is discouraged as most investors, even professionals, cannot consistently choose winning stocks. The better strategy is to invest in the overall market via index funds. 15. Inflation and Real Returns: The book explains how inflation erodes purchasing power over time and stresses the importance of investing in stocks and other assets that offer returns above inflation for long-term wealth building. 16. Bond Investing: Malkiel also discusses bonds, suggesting that they should be part of a balanced portfolio. He covers the basics of bond pricing, yields, and the relationship between interest rates and bond prices. 17. REITs and Real Estate: Real estate investment trusts (REITs) are recommended as a way to invest in real estate without directly owning property. They offer diversification and steady income through dividends. 18. International Diversification: Malkiel encourages investors to include international stocks in their portfolios to further diversify risk and tap into growth in global markets. 19. Avoiding Investment Scams: The book advises being skeptical of “get rich quick” schemes and promises of high returns with low risk. Malkiel warns against trusting salespeople or gurus who claim to have special insights into the market. 20. Taxes and Investing: Tax efficiency is another important consideration in investing. Malkiel suggests using tax-deferred accounts (like IRAs or 401(k)s) and minimizing trading to reduce taxable capital gains. 21. The Role of Bonds in a Portfolio: Bonds provide stability and income to a portfolio. Malkiel recommends adjusting the stock-bond mix based on age, risk tolerance, and market conditions, with more bonds as one nears retirement. 22. Stock Market Anomalies: The book acknowledges that market anomalies (like small-cap or value stock premiums) can exist but argues that these are not reliable or sustainable strategies over the long term. 23. Realistic Expectations: Malkiel encourages investors to have realistic expectations about returns. Historically, the stock market has returned around 6-7% annually after inflation, and expecting much higher returns can lead to risky behavior. 24. Retirement Planning: Planning for retirement is a major theme, and Malkiel emphasizes the importance of starting early, saving consistently, and investing in a diversified portfolio to build a secure financial future.