The reason why most retail investors (RI) fail to beat the market (i.e., the major indexes) is because they actually listen to the advice of financial advisors and market commentators and follow what they say to their investment peril. The most basic advice given to retail investors is they should find companies that have strong brands and a long history of excellent performance and invest alongside them to capture their positive future returns. What this means in practice is that the RI buys at a relatively loft price (p/e wise). The advisor then says to hold onto the stock unless there is a fundamental change that adversely affects the future outlook of the firm, like increased competition or a negative change in customer buying habits. At that point, one should consider disposing that stock and find a better investment. However, by the time a retail investor finds out that the firm is no longer a wise investment the stock price would likely have fallen hard already. The RI is now faced with the prospect of selling at a low price because he is among the last to know that the firm is now in trouble. Therefore, the retail investor buys high and sells low, instead of buying low and selling high. He buys when a firm's prospects look good and sells when it looks bad just as he is told to do so by his financial advisor and in the end underperforms the market.