Taking out a prosper loan to buy stocks

[Evan]

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You have to get 8-10% returns on the market (historical averages that most investors don't even get)

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I agree with most of what you are saying, but if 8-10% is the average isn't this what most investors should end up with? It's like saying your ev is $8 but most of the time you will end up with $5.

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It's because people don't invest in boring indexes. They'd rather buy individual stocks and lose money or make less than the market.

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This doesn't make any sense to me either. Shouldn't a random individual stock make the same amount as the ev of the market in the long run? Why is your ev less because you are buying an individual stock? If the stock is more risky shouldn't it have a higher average return?

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1) people buying random (or not random) stocks incur trading costs that aren't a part of market benchmarks
2) people have to pay taxes on sales
3) there's a long tail of terrible performing stocks...while it doesn't change the ev, you're thinking about the variance wrong