You would think that professional stock pickers, who spend all day analyzing companies trying to pick good stocks and avoid bad stocks, could outperform the stock market average, which is made up of all the good and bad stocks combined.
They don’t.Over the past twenty years, 88% of all actively managed mutual funds have underperformed their respective indices.*
The reason why their performance is so dismal is that markets are efficient. With so many buyers and sellers out there, most of a company’s future growth is already priced into its stock price.
It’s not that you can’t beat the market by picking individual stocks. It’s just that your chances are slim, and the price you pay for failing is prohibitively high.
Life usually gives you an opportunity to make smart decisions after you have learned from your bad decisions.
What you never get back is the lost time from the bad decisions made.
This is why Coffeehouse Investors maximize returns through a portfolio of low-cost index funds – mutual funds that replicate the returns of the market.
Build a smart portfolio today, while time is on your side.
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Also, tune in to my latest webinar, How Women Are Winning In Wealth, next Tuesday, October 26 at 6 pm. In this webinar geared toward women, I’ll share why the Coffeehouse Investor ground rules are the ideal investment and financial planning approach to support the successful female investor. You don't want to miss this discussion - register now!
*source: SPIVA - S&P Dow Jones Indices 2020