first of all, you need to distinguish between daytraders and investors there is NO 20 yr period in american history where a dollar cost averaging investor would have lost money ever to whom are you referring - investors or traders? both participate in the freemarket.
I'm referring to generally speaking. EVEN if an investor made money over 20 years, the risk/reward when considering inflation, the amount of comissions, transaction charges (loads, etc) means IMHO that an "investor" in mutual funds has lost. (that is, in absolute terms they might have made money but they also assumed all the risk, meaning if there had been a crash and the market never came back the mutual funds would have still collected their fees, thus if you assume all the risk and split the return 50/50% with the mutual fund I consider that losing). A good example of this is most mutual funds versus buying an index like DIA or SPY, after calculating all the fees the most funds severely lag the results if one had put them in the index fund. So, I'm not asking if in freemarkets people can make money. I'm asking, in the bigger sense, that in freemarkets most people lose. Often at tops volume spikes (also at bottoms), someone is on the wrong side and someone is on the right side. My opinion, is that while the absolute shares traded are even, there are fewer buyers, buying a lot when most people are selling, and fewer people selling larger lots when most people are buying. This would agree with the above statement. I think its interesting because the theory is that in free markets everyone succeeds. (I'm not arguing there is a better system, etc. I'm just curious watching trading, volumes, business publications) what most traders think since most of the public thinks the public benefits by free markets.
"I'm referring to generally speaking. EVEN if an investor made money over 20 years, the risk/reward when considering inflation, the amount of comissions, transaction charges (loads, etc) means IMHO that an "investor" in mutual funds has lost. (that is, in absolute terms they might have made money but they also assumed all the risk, meaning if there had been a crash and the market never came back the mutual funds would have still collected their fees, thus if you assume all the risk and split the return 50/50% with the mutual fund I consider that losing)." i think your "HO" is a little weird. they beat inflation, and they beat (over most rolling 20 yr periods) most, if not all other asset classes. most people would call that 1) a winning investment look, the stock market, like the economy - CREATES wealth. as a proxy for publically traded companies of the economy it is a way to participate in the wealth creation engine that is capitalism the above people didn't Lose. that's absurd.
Until you understand the concepts like risk adjusted return you will never be rich. For example in a given year, is using 100% equity and getting 15% return better than getting 10% return with 1% equity? (I know, there are drawdowns, and other things to consider). Since I saw someone win the lottery I guess I should buy as many lottery tickets as I can, since in "absolute" terms I saw someone use it a winning strategy. Then there are things like survivorship bias,etc. This is going off topic, but your response was so diametrically opposite to my way of thinking I'm shocked you even think that.
It might be better to say that "the majority underperforms" on an overall basis. The majority tends to do the wrong thing at the worst time; i.e. hold losers too long and get rid of profits too soon.
In a true free market the majority does better than the majority in a market that is not free. This means that in absolute terms the majority should prefer free market. This I state because I believe a true free market waste less resources(less fighting for tax money), and creates more wealth(greed is a powerful drive). In relative term the majority does better compared to the rich minority in a market that is not free than the majority in a true free market does compared to the rich minority. So what is most important for the majority? Having greater wealth in a free market, but living with the thought that some have much more, or having less wealth but knowing that the rich donât have very much more either.
But what creates these tops and bottoms? Is having a central bank compatible with true freemarkets? Does the fed creates bubbles or avoid them from materializing?
How would you like your fries, with ketchup or mayo? Ketchup (absolute value): 1966 to 1983 (OK, not 20 years but close enough) Mayo (relative, inflation adjusted value): 1954 to 1985 (definiatelly more than 20 years) Source: http://www.dogsofthedow.com/dow1925cpilog.htm Actually, silly me, I missed the 1920 to 1943 period, when there was also going nowhere or down in the markets... OK, just for a KO I will also throw in the 1928 to 1949 period....