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For one thing, it is easier for an individual investor with a fair amount of money to beat the S&P than big money managers because the individual investor is not managing several billion. Getting in and out of large positions is not simple, and such moves often change the market. Managers of large amounts of money are by necessity less agile.

I do not limit myself to any capitalization area - I do not look only at small, mid, or large caps. I just try to buy what is doing well. Of course, I do look at volume. Once I was interested in a stock, but when it had traded 0 shares by noon, I lost interest.

I have just begun to get used to trading individual stocks. It is certainly more difficult, psychologically, than trading mutual funds. Besides, a good fund is worth a 60+ day hold, and many stocks disappoint sooner. Trading mutual funds was a piece of cake, but that is pretty much over, although even with Fidelity's trading restrictions, I have done OK in my wife's retirement account (limited to Fidelity funds) this year. And I have some good ideas for next year.

Another thing about professional money managers: many of them are just flat stupid or devious. For various reasons, I gave some money to Louis Navellier once. He lost about 15% in one week, and then began to lecture me on thinking "long term". Fact is, the technical sell signals on the stocks he bought for me were totally obvious. In addition, you make more money in the long term if you avoid losing it in the short term. I took the money back, and have never dealt with a "professional" since than. I should also say that I have never lost that much over any period of time before or since, not even in a margin account.

Trend following timing services do not do well when there is little, if any trend. That is the problem with most of the timing systems at this point. But the market still does trend sooner or later - hopefully sooner.
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