Why it's so hard to beat the market (Wisdom of Crowds) re-think

[misterkel]

The Total Market does worse because it includes lots of tiny companies on the verge of failing, whereas the S&P 500 has the advantage that laggards are continuously falling off and new leaders are being put on.

Yep. Has a name. Survivorship Bias. And it distorts the stats upward because losers disappear from the index and winners emerge into it. I doubt it accounts for more than 15% of beta, though. Just a hunch.

 

[heypa]

Don't forget the value of the DOLLAR if you are a long term holder. ( investor not trader}