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!
Quote from Index piker:
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.
