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The point of index funds isn't that at any moment in time no one can have a market beating strategy. The point of index funds is that by definition the bulk of
by pedrocr 10y ago
The point of index funds isn't that at any moment in time no one can have a market beating strategy. The point of index funds is that by definition the bulk of the market can't have above average returns. So as a retail investor your best bet is to just find a cheap way to ride the average of the market.
- ikeboy 10y agoThat's a valid point, but plenty of people do claim that "no one can have a market beating strategy". Strong EMH.
- hilop 10y agoAnd yet one of the assumptions of the EMH is that there are people who beat the market (using pre-public information), which is why you can't. The EMH is just saying that 31/32 teams will not win the Super Bowl. Unless there's a version of the EMH that doesn't believe in the speed of light.
- darawk 10y agoThose people are demonstrably wrong. See: all successful quant funds, HFT firms, etc..
- walshemj 10y agoTrue but some of my active funds correctly saw the problems with the UK banks and got out before the big losses an index fun would have had to buy those banks and taken the loss.
- iends 10y agoThe saying is "a broken clock is right twice a day." Correctly reading and responding to market conditions is not sufficient. You have to do it continually.