Why is it so hard to beat the market?

[BlindLemonBoosh]

Quote from Don Bright:

I would love to see the results of any fully automated system generating a minimal amount over the long term ($250K or so). We've had and have "systems" that traders use to make that much or more, but again, there is a lot of human intervention.

(Not challenging anyone, just extremely curious)

Don

Don, I hope you're not worried about becoming obsolete...

 

[Don Bright]

Quote from BlindLemonBoosh:

Don, I hope you're not worried about becoming obsolete...

I've been obsolete for years, but my traders are state-of-the-art, LOL.....and they're the ones I learn from.

Happy New Year everyone!!

Don

 

[jack hershey]

Quote from Trader666:

P.S. WRONG! To make 30% a year, one needs to make 2.21% a month. You can't even do 7th grade math... talk about public mistakes... as I said, you seem to have a need to make an ass of yourself.

lol

 

[jack hershey]

Quote from Trader666:

Really? Then post what I wrote about PF and what you think is wrong with it so I can publicly show that YOU are the one who doesn't understand it... you seem to need to make an ass out of yourself. LOL

I share the views of the others in that thread. QED.

Please do not make requests of me. A lot of others have asked you to contribute the basis for your remarks and, further, they, then, have offered to set you on the right track. You stopped posting.

It comes down to the fact that there is no point in caring what or how you get to where you are. You will just continue to post whatever.

It is logical for me to pass from now on.

Continue as you wish; its your track record.

2007 is going to be a great year for a lot of people.

 

[fearless9]

OK chicos ... I have skimmed this thread only because I dislike confusion ... I am only a simple boy and many of you are confusing people.

Firstly, why would you contempt "beating the market"?
Is this some form of vendetta for the pain that you have inflicted upon yourself because you think that you can trade!

Why dont you find an instrument that you like trading;
find a time frame, range or volume bar that you are comfortable with;
find a method that produces a net stream of positive results;
use data feeds that you can compare and rely upon;
use a broker and order entry that copes with your style of trading;
and muy importante, forget all this childish nonsense about "beating the market" and get on with the serious business of making money.

 

[traderdragon2]

If you are not beating the market, then you shouldnt be trading in the first place. Its a lot less work to simply buy the index and become a buy and hold investor.

If youre not beating the market, then joe average who puts money into the index each month with zero work is kicking your ass.

Why in the world would you "work at trading" to make less than the non-thinking joe average investor????

Ill stop trading the day the indexes consistently beat me. Trading is far too much work to make less than the index each year.

 

[jack hershey]

Trading at a pace to keep even with the markets is not making any money.

In general, you can gauge your purchasing power and wealth by how much moe you have compared to the increase in the markets over the years.

Markets are the base line.

For some reason thenFEDS and other tax the money made below the increase in the markets. So you have to take that into account too.

Determining the potential to make money is a major consideration. This is the true measure for effectiveness and efficiency.

I feel the 2007 will be the first year when making money relative to what is there to be made will finally get on the table.

It is a little difficult to say how it will be done but it will probably happen as a consequence of a standard method of expressing the making of money.

 

[stock_trad3r]

Quote from stocktrader3429:

Here's the thing. I don't understand why it's so hard to beat the market. When I go online at some of these financial sites like Forbes or Kiplinger, they are impressed with 20% per year return on their investment.

I'm not a trader. I invest for the long-time, usually no more than a year. And the only reason I stick to a year is because of tax brackets. But if the stock isn't doing well, I tend to quit early and reap in the profits (or losses).

So, I've been investing since Jan. 2005 and my performance last year was 31%, and my performance so far in 2006 is 37%. Based on the S&P 500 YTD return of 14.9%, I'm doing really well.

However, I didn't find it difficult to beat the market at all. I started with $100K in investment with 10 stocks to diversify my portfolio. My portfolio has always held 10 stocks at a time, and I had to dump 1 one stock in 2006 because it wasn't moving up fast. If I had waited a whole year, it would've only gone up 15%, so I didn't make a bad bet. I also put a %T stop loss requirement.

Going by this consensus, if you beat the market, you are supposed to be a rock star. I've been beating the market for four years (2 year paper trading, 2 years actual), and I've done well. I don't think I'm suited for day trading, so I'm happy with the returns.

My strategies are very simple as well. I'm glued to the news and I tend to only invest based on fundamental analysis (P/E ratio, earnings growth, free cash flow, etc. etc.). I never believed in technical analysis because it seems to me that you are just smartly trying to gamble.

I also read a lot of financial news sites and get my ideas from them. If they are pumping a particular company, I do my research and decide whether or not to invest. Before I invest, I thoroughly do my research on the industry, sector, company and competitors, but it's fairly normal.






What I want to know is - is beating the market consistently really that difficult? And based on my performance, is there anything special that I'm doing, or have I just had luck on my side for the last four years?

Thanks for your input.

It is very easy to beat the market. Just buy stocks that go up. Stuff like Chap, goog, aapl.

 

[MattF]

The market's merely a baseline; unless you're trading in one of the top 3 gainers this year (Peru Lima General Index @ +187.2%, Venezuela Stock Market @+150.4%, and the Ho Chi Minh Index @ +142.6%), you should be able to beat it *relatively* consistently as long as you don't make any severely stupid moves.

Many are happy with 20%, either because it's a sizable return with a lot already in there, or they took relatively low risk and still made out well...that's all perceptive to the beholder.

 

[Neet]

Quote from traderdragon2:



If youre not beating the market, then joe average who puts money into the index each month with zero work is kicking your ass.

I have to say, you made me laugh.

And at this point I bet there are many out there wishing they had been Joe Average in 2006 to get a 16% return (DIA).

Investing is not that hard. Swinging not too far either, now daytrading, that's where the real games are played.

Cheers.