We think deeply and often talk about our strategies to outperform the various markets, but our success rates are close to dismal. No, I’m wrong! They are dismal. Only about 5% of us manage to win this challenging task! Why?
We underestimate the many factors that both influence the complex marketplace while we consistently overestimate our abililiries to evaluate them. That is a recipe for disaster, and disaster is indeed the common ending. It seems like the less I try to outplay this game, the better I do. These days I just ignore the daily predictions and their predictors. This works for me. Trying harder generates poorer outcomes for me. What works for you?
Here is a Link to an article with a few insightful and interesting comments and statistics.https://www.aei.org/carpe-diem/more-evidence-that-its-really-hard-to-beat-the-market-over-time-95-of-finance-professionals-cant-do-it/
I especially liked the following paragraph:” Similarly, over the 15-year investment horizon, 92.43% of large-cap managers, 95.13% of mid-cap managers, and 97.70% of small-cap managers failed to outperform on a relative basis.“
I wish you all successful investing and realize the huge odds against that global outcome. We can’t all be winners.