Really beat the market average trading

Really beat the market average trading

Many novice investors into the market, these days, I hope one day they can leave their boring daily life and work through their investments. But there is a problem, everyone's hearts. The average punter can absorb their money in the market continue to win again and again? Beat cheating, gambling and manipulation of these institutions in our market, we believe that the correct information. Is it really that easy to make consistent money each week on the market for us to know the entire system of manipulation?

David and Goliath

The answer is not easy, the answer will depend on who you ask. From "outperform" We're talking about everyday working Americans who are trying to gain greater capital gains and income than S & P 500 index return. "

David EY "history of greed, Scharner author explained:" This way, "Each of us has some in our theft. We buy securities, because we think we know someone or something, others do not, I do not think anyone can surpass the S & P 500 index does not take more market risk. "

Some of us may have needed to make informed decision-making tools (and connection), which will lead us to a higher rate of return on a portfolio, but other similar stockbrokers, bankers and big business, most likely have an advantage, right? Although there are many people in the financial industry, they can not legally trade insider information, they also have certain financial statement analysis skills, to develop a deeper understanding about a given company. 

"Naked Retirement: Author Robert Laura, to stimulate a more meaningful guide to retire" and the President's SYNERGOS Financial Group, said, "The reality is there will always be a temptation to try to beat the market, especially those who beat it consistently revered height (Bill Miller, Peter Lynch), and / or are being compensated and hedge fund managers, I think you can beat the market, but even a broken clock is twice one day The best way to describe it: It is possible, but unlikely. "

According to Laura, the sad reality is that the general individual investors almost no chance to beat the market. He said, ordinary investors use mutual funds, are stuck in 401 (k) plan, essentially tracking the broader market indices, and pay higher fees than stock, index funds or exchange traded funds. There are also many types of investments mutual funds do not use stops to protect gains, therefore, not always able to provide the type of protection that can be personalized portfolio. As he puts it, "investors failed to establish, from the outset to go."

In the 401 (k) plan is no better investment. "401 (k) plan as a benchmark, most companies do not have a good option plan funds investment policy, you can not even get some asset classes in many and most of the consultants are sales people, not the trustees and just teach how to sell funds, "he adds. "

Costco investors are investing responsibilities and interests. They are investments in active learning how to work, and less intimidated. Laura said investors are learning to stocks is not terrible, because we believe that valuable information is available to everyone, if they know where to find it, and how to use it.

He added, "ETF and index investing allow people to imitate the advent of the market, rather than trying to beat it, which is a better, cheaper perspective."

A lost cause it?

Founder FinancialMentor.com Todd R. Tresidder have said in 2010, "all the evidence to support a disappointing fact, ordinary investors as a whole underperformed the market as long as they try to" beat the market ", they actually poor performance. "

Ordinary investors to achieve better risk-adjusted returns is the best way out by focusing not on the performance, said Tresidder, but by less lost. In other words, ordinary investors have a competitive advantage - mobility.

"Big investors in the market, but the little guy is flexible and can be bought or sold and will not affect the market - something this big guy can not do. Risk management systems provide similar or slightly improved investment performance relative to the average investor market significantly reduce the risk, "he said.

Help odds

Investors what "beating" of the market, in order to increase their chances? Laura said, there are a few things:

Using low-cost funds and / or low-cost trading platform. The best way to make money is to save money.

Develop and follow converted into just doing what you say you want to do a discipline.

To each investment in your portfolio bid to keep prices and selling prices, as well as one or two reasons to buy, hold or sell at the value. This gives you specific action standards, and provide your portfolio objectives and specific directions.

Concerned about headline risk. Set up e-mail alerts on your investment, so that the new information to understand them, you know it's early stages of considering changes. Mark your calendars, like earning date, intellectual property timetable and industry reports, such as the Fed meeting, unemployment, housing starts, and other information will affect specific sectors or safety spectacle.

Scharner proposed investment you know and understand, such as solid, profitable small cap stocks and even micro niches, you can monitor and understand. These can be appreciated much faster than large caps price equivalents.

Be higher than the market return is the only way to develop a competitive advantage, says Tresidder. "This is either through the development of knowledge and information flow, development and utilization of the investment strategy of irregular market behavior, through extensive research."

According to Tresidder, the only way to beat the market is to develop a competitive advantage over passive transaction costs and market returns.

Baseline

Whether individual investors can beat the market debate is as old as the stock market itself. Who will find a wealth of investment is often preached, they have excellent analytical skills, enabling them to predict the market. Investors who have suffered losses would tell a very different story.