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Author: Illini2001 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75384  
Subject: Re: Asset Allocation Date: 7/30/2005 8:43 PM
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> I guess that means that the managers of 90% or more of mutual funds and virtually every financial planner/broker must be a dumb, unenergetic slob.

Nope... First off, mutual fund managers must take some of your money to pay themselves. That in and of itself creates some "friction" and makes it more difficult to beat the market. The other thing is that mutual funds, hedge funds, and pension funds ARE the market for all intents and purposes. I don't think you or I buying or selling 100 shares of XYZ or ABC really make much of a difference to anyone other than ourselves. Fidelity or Vanguard buying or selling $5 million worth of shares moves the earth. It's hard for them to do it quickly and more importantly, to do it undetected. Because of those reasons, you and I can adopt slightly different techniques than pros do.

I would never say it's easy to beat the averages as I am relatively new to the game and have not made oodles of money, but I would say the biggest reasons for not beating the averages are:

1) Not putting in the time or effort (laziness or indifference)
2) Bad luck
3) EXCESSIVE trading
4) Having EXHORBITANT amounts of money to invest (in which case, getting average return on millions/billions of dollars probably won't kill you).

Just my two cents...

Illini2001
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