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I’d like to offer a source to back up my statement about transaction costs: A Random Walk Down Wall Street. It’s true that even a retail investor can research
by ttul 7y ago
I’d like to offer a source to back up my statement about transaction costs: A Random Walk Down Wall Street.
It’s true that even a retail investor can research and implement a strategy that beats the market average. However, their transaction cost - which includes the cost of their time doing research - will, over a large number of tries, eat up this advantage.
Said another way: could _anyone_ reliably beat the market by enough to pay off the costs they expended coming up with their unique winning strategy? Not just you - I am sure you are very smart - but any typical retail investor.
- thebean11 7y agoI could randomly select any task and then randomly select a typical retail investor and they'd be unlikely to accomplish it. That doesn't mean nobody should attempt it. Not that I'm advocating trying to time the market, but I don't buy the "the average person can't do it so you shouldn't try" argument.