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Originally Posted by CrazyPhuD
WTH are you talking about? The science is actually really clear on this...NO one...not even 'great' investors actually succeed in 'beating' the market over the long term. The technical term eludes me right now but over the long term everyone returns to the mean. Some of this you'll never see because portfolio managers kill off their failures so the failed funds don't show up against other ones. Studies have shown this time and time again and it's why the big caveat always is states...past performance is no indication of future performance. Odds are good if someone has outperformed the market in the past they are going to underperform it in the future. Everyone returns to the mean. Seems surprising but that's what the studies have consistently shown.
The notion that trading individual stocks or trading often is a 'good' idea is a scam propagated by Wall Street. Remember they get paid when you make a trade regardless if you make money. The more trades you make, the more transaction fees you pay. Unless all your trades are free every trade is bleeding your returns.
The funny part is, even when people 'win' they are often losing, because many times the market gives better returns than they were able to. I'm with John Bogel here, the best strategy for consistent returns is a diversified investment that tracks the market. Pick the low load, low cost funds. Actively managed funds(either you or someone else) sounds like a good idea, but the reality is they don't tend to out perform the market over the long term AND they cost you more.
The worst it about many retail investors is that it's little better than gambling to them. You remember your 'successes' but you'll forget your failures, always chasing that 'high' of that big gamble you win with. Like I said this is what Wall Street loves to propagate because they don't care if you win. They make money the more trades you make(or in funds they make money regardless if your fund actually makes money).
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There are several examples of people who beat the market consistently. Are they going to beat it every year? No. But to act like it is impossible to beat the market is ridiculous. No with that being said, most people can't beat the market.