I lurk this sub a lot and I'm in agreeance with the general wisdom here to just buy low cost index funds and wait it out for the long haul. I believe that for the most part people don't beat the market.
I've been thinking though to the past discussions with people in life. Some of them always seem to have a "money guy" who "consistently beats the market". They say they are shown charts, data, and everything. Some of these people are relatively smart people too and actively engaged in their investments. Then there's always someone or someone with a friend who actively trades who makes money. Finally you see evidence on reddit and people at financial seminars who are active investors who made millions (Warren Buffet?), way more than the paltry 6-8% returns from the S&P.
So what is it?
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Does John Citizen on average not beat the market? As in if you took 1,000 active trading John Citizens at random most would not beat the market. It's possible to be good and beat it but a sample of 1,000 people yields that it is not likely. Similar to banking on being a professional rapper or football player. Not that it can't be done, but it's unlikely statistically. Therefore the general advice, without knowing the person, is to just say "buy index funds".
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Is it mathematically impossible to beat the market consistently over and over without insider information? As in you mathematically will never beat the house in a casino. I've read stats that state random stock picking beats even the best minds in wall street and some of the top active managed funds fail to beat the S&P. If that's true how are these seminar guys and people posting their portfolio on reddit winning? Do they straight up lie?
Submitted August 06, 2017 at 11:18AM by B8899832j http://ift.tt/2v9hgJP
