Burton Malkiel is an author, economist, and Wealthfront’s chief investor.
Fairfax Media via Getty Images via Getty Images
Burt Malkiel warns investors against trying to time the market in a new letter.
The author and economist advocated for long-term, passive investing in broad-based index funds.
He told BI it’s “invariably the wrong decision” to cash out when stocks are tumbling.
As tech stocks propel the market to record highs, Wall Street legend Burt Malkiel is glad he invested in Nvidia — but only through index funds.
The chipmaker’s share price has surged 12-fold since the start of 2023, supercharging its valuation to an unmatched $4.4 trillion.
Malkiel told Business Insider that he’s happy to have owned the stock as part of the S&P 500, as the idea of investing directly in Nvidia a couple of years ago — when it was trading at more than 100 times forward earnings — “would have scared the hell out of me.”
Malkiel, 92, the chief investor of Wealthfront, a robo-advisor with over $80 billion of client assets, warned against selling stocks with a plan to reinvest once prices retreat from all-time highs.
The retired Princeton economics professor — a renowned advocate of passive investing — told BI the “biggest unforced error” that investors make is trying to time when to sell and when to get back in, adding it is “virtually impossible” to get both right.
Malkiel said he understands people feel pressure to sell when stocks are dropping and they’re watching their life savings shrink.
“Boy, I know the emotions, I know how hard it is,” he said. But cashing out is “invariably the wrong decision,” he added.
Malkiel argued this in a Thursday letter titled “Don’t Miss the Market Rebound,” cowritten with Wealthfront’s investment-research boss, Alex Michalka.
In the letter, Malkiel said that the 10 best days for US stocks in the last 50 years closely followed significant market declines. Five were during the global financial crisis, three were at the height of the COVID-19 pandemic, and one was after Black Monday.
The final and third-best day on the list was April 9 this year, when the S&P rebounded 10% to register its largest one-day gain in 17 years. The index had fallen 12% between April 2 and April 8 in reaction to Donald Trump unveiling his tariff plans.
Emotions, concentration, and memes
Malkiel recommended that people invest part of every paycheck into a diversified index fund, a strategy called “dollar-cost averaging.” This “set it and forget it” approach minimizes advisory and transaction fees, and helps investors avoid making hasty decisions and missing out on returns, he said.
He criticized leveraged ETFs that promise a multiplied return on a stock or index. “These are just sort of pure speculative pieces of paper, and that bothers me,” he said.
Meme stocks, which are having a renaissance, “invariably lead you astray,” Malkiel said. “Like any gambler, you can have some hits and make some money, but over the long run, you’re going to lose money.”
The market’s long-term performance remains “damn hard to beat,” he said, adding that believing you know better is “likely to be a recipe for disaster.”
Sydney Sweeney stars in a denim campaign for American Eagle.
Courtesy of American Eagle
Sydney Sweeney’s American Eagle ads have faced backlash from critics who say they’re a “eugenics dog whistle.”
The publicity around the ads helped Sweeney become a meme stock icon overnight.
PR experts said Sweeney’s brand thrives on controversy, and this will only boost her appeal.
You may have heard by now that Sydney Sweeney has great jeans, or genes, or both. According to public relations experts, she also has pretty great brand awareness.
That’s perhaps not the positive prognosis you’d expect for someone whose latest American Eagle ad campaign, “Sydney Sweeney Has Great Jeans,” sparked online backlash this week.
In the pricey campaign — the brand’s most-expensive to date — the 27-year-old actor stars in a series of clips that lean heavily on punny wordplay and glimpses of her cleavage. (At one point, she even cheekily scolds the camera: “Hey! Eyes up here!”)
“Genes are passed down from parents to offspring, often determining traits like hair color, personality, and even eye color,” Sweeney says in one clip, the camera panning across her denim-clad body. “My genes are blue.”
“These days, a blond, blue-eyed white woman being held up as the exemplar of ‘great genes’ is a concept that maybe shouldn’t have made it past the copywriters room,” Jenny G. Zhang wrote at Slate.
TikTok was less charitable. “It’s diabolical copy in this political climate,” user @JessBritvich said in a video with over 2.8 million views.
Not everyone was fazed. Some pointed out that the American tradition of having sexualized young actresses hawk denim dates back to Brooke Shields’ infamous 1980 Calvin Klein ad; conservative pundits like Megyn Kelly were happy to call out “the lunatic left” for being thrown into a tizzy. Even White House communications manager Steven Cheung weighed in, calling the backlash “cancel culture run amok” in a post on X.
Meanwhile, Sweeney herself has continued on with business as usual: On Monday, she posted a photo of her manicure to her Instagram Story. She’s so far declined to address her detractors or release a statement, and her representatives, as well as American Eagle’s, didn’t respond to our requests for comment.
If people are waiting for Sweeney to capitulate, it looks like they’ll need to set up camp.
“She is not buckling to the mob,” PR and branding expert Eric Schiffer told me. “She’s going to be even bigger because of this.”
Sweeney’s brand is about doubling down, not shrinking away
Sweeney’s team-up with American Eagle isn’t the first time she’s leaned into her sexuality and sparked controversy while promoting a product. The campaign comes on the heels of her spring collaboration with the hygiene company Dr. Squatch on a limited-edition bar of soap called Sydney’s Bathwater Bliss, which the company says is made with “her actual bathwater.”
Online reactions to that campaign were predictably divided, and a common refrain was to accuse Sweeney of becoming a pawn for the patriarchy. But criticism around Sweeney’s perceived lack of agency may have been overblown: Sweeney told E! News she actually pitched the bathwater soap idea herself. She said that men “kept asking about my bathwater,” so she listened.
The American Eagle ads proceed in much the same way, positioning Sweeney as a willing sex symbol who’s just here to give the people what they want.
According to Schiffer, Sweeney’s recent endorsements reinforce the core tenets of her brand as a woman who’s fearless, rebellious, unabashedly sexy, and apparently comfortable with a certain level of controversy.
“I think she likes it,” Schiffer said of Sweeney’s penchant for riling up the masses. “She’s got a strong sense of self, and my sense is she doesn’t have a lot of anxiety over this kind of thing.”
Sweeney’s path in Hollywood is more calculated than it appears
Sweeneys’ breakout role as Cassie Edwards, an insecure high schooler who seeks validation in men in HBO’s “Euphoria,” put her on the map. The show’s controversy-courting depictions of sex and drugs — and Cassie’s many nude scenes in particular, which critics called gratuitous — made her a sex symbol the public couldn’t quite decide whether they should root for or apologize to.
When Sweeney finally spoke about baring it all on screen, she set the record straight. “There are hour-long compilations of world-famous male actors with nude scenes who win Oscars and get praised for that work,” Sweeney told Cosmopolitan. “But the moment a woman does it, it degrades them.”
Instead of shying away from her assets, Sweeney frequently takes roles where she appears comfortable embracing them. While hosting “SNL,” she openly joked about how showing her breasts was her career plan B, and played a Hooters waitress in a skit.
Embracing her sexuality creates a dissonance with Sweeney’s savvier business decisions, like taking a risk on the Marvel flop “Madame Webb” because it forged valuable future connections at Sony, and pulling double duty as star and executive producer 2023’s box-office hit “Anyone But You.”
She’s also been up front about her need to hustle for a paycheck, telling The Hollywood Reporter she can’t afford to take a break from acting.
But while Sweeney may be taking brand deals for the paycheck, it’s unlikely that she isn’t thinking critically about her image when signing on to a blockbuster American Eagle campaign.
‘Capitalism trumps cancellation’
Highlighting the appeal of a blond white woman with jokes about “genes” was always going to be risky at a time when white supremacists feel politically emboldened. But despite the strong reactions on social media, the PR professionals I spoke to agreed that there’s a difference between aiming to offend people and playfully ruffling a few feathers.
“The question is, was [the campaign] meant to offend? I think the answer to that is an unequivocal no,” Tara Goodwin, a crisis communications expert and founder of Goodwin Consulting, told me. “Was it meant to be thought-provoking and maybe get you a little bit riled up? Yes, I think so. And all in the name of money.”
It’s more likely that Sweeney’s team anticipated some level of pushback, as with the bathwater stunt, and decided it would be worth the gamble. “She likes to be a little bit provocative,” Goodwin said.
Sydney Sweeney attends the London premiere of “Echo Valley.”
Stuart C. Wilson/Getty Images
If sex sells — well, so does outrage. Sweeney seems at ease leaning into both. And if there’s outrage online, Schiffer noted, that’s only half the story.
“The numbers speak. I mean, look at all the stuff that some of these stars have been through, yet they continue to succeed,” Schiffer said, citing Morgan Wallen as a recent example of a controversy-courting superstar.
Sweeney’s numbers are speaking loud and clear: Dr. Squatch told AdWeek that nearly 1 million people signed up for the Sydney’s Bathwater Bliss giveaway in a five-day period; one month later, Unilever acquired the brand in a reported $1.5 billion sale. After Sweeney’s partnership with American Eagle was announced, the company’s stock soared 19% in premarket trading, earning Sweeney the title of “meme stock icon.”
“Yeah, she may face some casting directors who will see her as a slight liability with some of the people that she alienated,” Schiffer said of Sweeney’s future, “but there’s going to be plenty of casting directors who will do backflips for her for the next project, so it evens out.”
“If the sales stay strong, corporate America will shrug at all this,” Schiffer concluded. “Capitalism trumps cancellation.”
