Can You or Anyone Beat The Market?

The quick answer is no, at least not consistently.

Most of Wall Street wants you to believe that there is someone out there who has the ‘right stuff’ to predict the market. This is due to most investors desire to beat the market. Unfortunately Wall Street knows that most investors make their investment decisions based on emotions. Both fear and greed come into play. These emotional decisions make for unsuccessful results long term.

Upper Wall Street with Trinity Church and Fede...
Upper Wall Street with Trinity Church and Federal Hall (Photo credit: SheepGuardingLlama)

If these Wall Street wizards really knew the best investments, why would they tell you?

If you believe that all knowable information is already in the price of securities, as I do. You will stop trying to ‘beat’ the market. As I have said in the past. Investors continue to search for stock market returns with Treasury bill risk and what they get is Treasury bill returns with stock market risk.

When you try to outwit the market you are trying to beat the collective knowledge of ALL investors. This is a formidable if not improbable task to accomplish consistently. There will always be someone who beats the market over the short term. Unfortunately there is no way knowing who if anyone will repeat their superior results.

Investors will increase their returns with less anxiety by harnessing the power of the markets. Use this knowledge to develop a portfolio designed for you and your circumstances.

By working with an investor coach/fiduciary adviser investors will be taught the right way to invest. Remember you don’t have to know everything about investing but you do need to know the right things.

One thing many investors are unaware of is survivorship bias in the mutual fund industry. Mutual fund families will state how their funds beat the market over a period of time. What they do not tell you is the funds which were closed due to poor performance. The regulations do not require these fund families to report closed funds therefore the overall performance of the fund family will appear much better than it really is. The manager of the closed funds will typically be absorbed into the surviving funds. Try…Try Again.

This is just one example of how Wall Street can mislead investors.

Stop being a victim of Wall Street and hire an investor coach. Your coach will help you build a prudent portfolio designed for you and your circumstances. And more importantly your coach will keep you disciplined to your plan.  True investing is not a short term process but rather long term in nature, unlike gambling and speculating.


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