You have a somewhat valid point. I'm not saying everyone will end of with average of "x". Sure some people will outperform (on a risk adjusted basis), However there is very little evidence that can be done consistently or that those persons can be identified before the fact. A trader seeking returns greater than say s&p 500 returns would be better off stepping up risk by passively investing in a basket of riskier components than to attempt it by trading activity. Secondly you make the mistake of thinking investing/ trading lend themselves to hard work , training etc etc. It does not, persons of avg intelligence are just as capable of performing as well as or better than the pro's through passive investing.
I wouldn't hold my breath if I were you. I'm not as clueless as you assume, I was profitable in 2008 as well. Thanks for the condescension anyway.
Ok I'm cutting myself off after this post... I won't spend the day posting on ET lol... but here's what I think your problem(s) are: -Youre actually totally correct when you say most people shouldn't trade. I say this over and over. The market is not a level playing field. If you come into the market unprepared people like me will take your money. I don't even think most people should be indexed because the left tail risk is much bigger than you'd think. -You make the mistake of thinking that the giant funds are the pros. They aren't. They are pikers for the most part. Just because an index fund has 900 trillion under management and have it all in S&P 500 doesn't mean that a big institution like that is the big smart money. These big players cannot beat the market for a very simple reason -- THEY ARE THE MARKET. It's kind of ironic when you really think it through. -Sharpe and the other academics are on thin ice... a lot of the way you are probably evaluating investments is based on a deeply flawed model called the CAPM. If you don't know what I'm talking about please get flat Monday morning and do some research before you trust your money to these models. -There is a body of consistently profitable professional traders who make returns that far outstrip the "pros" you reference. Many daytraders working with maybe $500k intraday buying power, who go home flat every night, who make $250k a year on a bad year and $4M on a good year. These people don't usually post here, don't usually write books, and don't manage outside money, don't usually teach... but they are there and they really aren't that hard to find if you're sincere and know where to look. There are also plenty of futures swing traders, etc who make returns of 50%+ a year fairly consistently. -Trading absolutely lends itself to training and hard work. Absolutely. I'm living proof of that fact. And, it also helps to be too stupid and too stubborn to quit. (I attribute most of whatever success I've had to that. (No joke)) It sounds like indexing is the right choice for you. It also sounds like you have done this in an especially auspicious market environment, so please be careful. If you arrived at the choice to index because you think trading is not possible, you are making a mistake, but if it's a choice of personality / time investment then no one can argue with you. Best of luck. Be careful... it's a jungle out there!
An ex-friend of mine who I had known for years took $100,000 in 1986 and turned it into $30,000,000 by 1996 investing and trading. His 2,000 share purchase of Microsoft in the spring of 1986 was the start of his return to investing after a hiatus of some years. He achieved his results with astonishingly little leverage and was consistently profitable on both the investing and trading side. His mantra was "Random walk my ass". That said, he was always quick to point out that much of the market could be quite random for extended periods yet that did not negate the fact that astute traders/investors could position themselves to profit from the more predictable aspects of the market. He was no piker yet he as I indicated he was quite negative on leverage. He maintained that it was one thing to bet it all yet an altogether different thing to bet double it all. To pretend that some people can't trade their way to an enormous net worth is beyond absurd. To pretend that most traders with a year's experience believe that it is easy is to portray us as imbeciles. Yeah, it is incredibly difficult to be a success. That is not a news flash. Why should that discourage me? BTW ... my friend and I had a falling out. I thought he should pick up his fair share of dinner checks. No more than his fair share mind you but certainly no less. The cheap bastard had a very hard time reaching into his pocket and I just stopped returning his calls.
You are aware that switching to attempts at personal belittlement are a clear sign you've lost the debate, don't you?
Churchill actually passed many belittling comments about Hitler during the war. And still won the debate ... lol. Of course you are correct that personal attacks are, as general rule, to be avoided. But how should we handle someone whose point is absurd and who has already lost the debate but is having a hard time seeing how lame his points are? Please advise.
Trading is too simple for most people to grasp.Unfortunately,getting to the point where it becomes simple is difficult for those that succeed and impossible for the rest.
if you just trade the higher probability trades, touching s/r,either getting out or getting in at these spots, you raise your odds and profits greatly
Disagree. While I know that many guys here are either paper traders (Roman Candle, etc..) or losing/mediocre traders (Mandelbrotset, etc..), I am not sure they would benefit from adopting a less active type of investment. They will still have to take decisions, and it is likely that what currently prevents them from being profitable (usually their ego - check their numerous posts thru ET in which they give trading lessons to others while they are hardly, if not at all, profitable), will still prevent them from making money regardless of the type of investment they choose. I agree on this point, you get more free time for other activities. The downside is that your profit potential - % wise - is much much smaller than what you can get in trading. Keep in mind that most people come to trading because they don't have enough capital to live off passive investment returns. So, they would probably better stop trading/investing entirely.