Why you'll never be rich

[rsliu]

I'm going to throw some thoughts out there that are relevant to this discussion.

1. 75% of mutual funds, after fees, do not beat the S&P 500 over any time frame. This is well documented. More importantly, there does not appear to be any serial correlation between time frames; that is to say, mutual funds that performed well 5 years ago don't perform better than average now (average for mutual funds, which is worse than the S&P 500), and funds that perform well now won't necessarily outperform in the future. In practical terms, this makes it extremely difficult, if not impossible, to consistently choose winners for mutual funds.

2. Over any time frame, there will always be winners due to random chance, simply because the number of players is so large. Buffett himself made this point in his coin flip tournament analogy. Look it up for a more in depth discussion of this point.

[Jeffmet3]

Large cap, "beating" the market is damn near impossible because inefficiencies have been worked out.

However, for Small Cap and International, I definitely believe that experts with a wide range of information and contacts at their disposal can beat the markets

[dopp16]

[ QUOTE ]
Large cap, "beating" the market is damn near impossible because inefficiencies have been worked out.

However, for Small Cap and International, I definitely believe that experts with a wide range of information and contacts at their disposal can beat the markets

[/ QUOTE ]

There are more inefficiencies in the international and small cap markets. And most people that "beat the market" generally do so in these asset classes. It is also more difficult, however, to measure SD and therefore determine whether you are in fact beating the market.

[mo42nyy]

the fees are out the ass on ITHAX