Is it market acumen or just luck?
May 14th, 2007While rereading an investment book, I was reminded of something individual investors tend to lose sight of. When someone does well in the equities market, it’s probably due to luck, nothing more.
I realize for some these is fightin’ words. But think about it carefully for a minute. By definition, half of the investors in the market (this also applies to actively managed mutual funds, but I’ll use ‘individuals’ for simplicity) will beat the market average over any given time period. That means before fees, you have a 50% shot of beating the S&P 500 (or whatever index you want to use) this year, maybe by a lot. Sounds great, doesn’t it? Except so does any randomly selected stock.
individual investors, investment, legg mason, luck, mit, mutual funds s&p 500
