Traders Cant Beat The Market

Discussion in 'Educational Resources' started by Free Thinker, Aug 19, 2003.

  1. LOL! Thanks vhehn!
  2. funky


    well, he actually says that active trading is a loser's game. which it is. the majority of people will lose.
  3. i do agree with him that most people should invest in index funds through etfs like spy dia ect.
  4. He makes a lot of sense.. just look at the countless journals that have failed here on ET.

    Your average person should invest in index funds and not bother trading or stock picking.

    Only those that are properly capaitlized and can accept the risks.. and are willing to dedicate their lives in studying the markets should even consider trading.

  5. jem


    I would rather be long a china fund and short an S&P fund. As a long term investment. Like I hae said in another thread I do not see how a market can allow a group the size of the baby boomers to retire gracefully. They are going to have to live their golden years in penny pinching fashion.
  6. This is basically the conclusion I came to for the average investor.
    If your not willing to put the countless hours of time in to
    develop a robust trading plan, just by SPY every month.

    Avoid all the mutual fund BS, etc....

    SPY all the way. Buy and forget.

    I haven't come across better advice for the average joe smoe to date.


  7. This phenomena will occur in any business (computer programmers, owners of storefront businesses). Take a large enough group of participants in any business and you will find that the returns for the group do not exceed the normal business profit (the return on Treasuries + a small risk premium).

    Also the distribution of profits will be random, meaning there isn't a sure fire formula for making above average profits (tiny classified ads, real estate, options trading, MA crossover etc... is the path to weath). This tells you that trading, as a business, has the same characteristics of all other businesses in that the profits for any large enough subset will be typical and that above average profits are distributed among participants in a way that looks like a random function (random distribution means some people will make more money, but you can't predict who based on a rule-like procedure.)
  8. maxpi


    Thanks for the link. I hope he is wrong!!
  9. Well put!
    #10     Aug 19, 2003