4 ms·
Doesnt the median user earn the market return which we could say is S&P 500?
by joelbluminator 6y ago
Doesnt the median user earn the market return which we could say is S&P 500?
- smabie 6y agoNot necessarily, the distribution of people's returns have a lot of skew or fat tails.
- hong_kong 6y agoThe average professional fund manager actually underperforms the S&P. It wouldn't be unreasonable to assume that the average retail investor does even worse. However, there's an easy way for people to overcome this - buying an index fund (Vanguard is very cheap), which lets you capture (almost) the S&P's performance.
- klmadfejno 6y agoIf everyone's strategy were to buy some collection of assets and sit on them, you would expect some definition of the average individual to earn the average market return. But users of trading platforms are probably trading actively, and making mistakes. It's also likely that the average user would benefit from a diversified portfolio to reduce the risk of losing big all at once. They're less likely to get that picking stocks themselves.