Quote from zdreg:
everyone of your above investments will give mediocre returns due to friction costs including the previously mentioned taxes commissions, buying on offers and selling on bids, poor executions etc.
unless u are operating in an area where you have an advantage you will failbecause of friction costs. the small investor has an advantage over the big money because he can obtain and dispose of his position without disturbing the market.
all evidence points to the fact that mutual fund managers and hedge fundmanagers cannot out perform the market because of the friction costs and the law of large numbers which force money mangers to ignore certain investments
the answer is that i am not interested in a diversified portfolio. i am interested in trading
where i have an advantage. no more no less.
when the day comes that i cannot i will go into index funds whether it is the stock market as a whole or sector efts . I certainly will not give somebody 20% off the top. and that individual does not share in my losses.
show me a money manager who shares in my losses and and does not receive compensation unless returns exceed a certain indice.
it will never happen because they cannot do do it.