Stock Trading and Other Things

why do over 80% of mutual funds and stock brokers fail to do beat the S&P 500 Index?

Why do over 80 percent of mutual funds and stock brokers fail to do beat the S&P 500 Index? If they claim to be so smart, why can’t most of them beat the performance of this simple index?

Public Comments

1. lots of little reasons. They cahrage fees, which lowers theyre performance. They collectively buy and sell a lot, which costs money to make so many transactions. They also are supposedly under pressure to sell losing positions they "don't have time to wait it out". Few do a fundmental analysis, regardless of what they claim: they do the technical analysis and buy and sell too often. Theyre are often forced to sell low, which really hurts results. Also, simply put many are not smarter than monkeys throwing darts- read "a random walk down wall street"