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Strategies & Market Trends : Value Investing

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To: jeffbas who wrote (4774)	8/22/1998 10:56:00 PM
From: Paul Senior	Read Replies (1) of 78625

And I agree the point is to do better. That's always the point IMO. But I am saying that if stock market happiness is dependent on beating the market or beating index funds-- there will mostly be disappointment. Very few people who call themselves investors can beat the market consistently (by 'investors' I exclude people who worked at MCD or WMT for 20 years and just bought or took company stock.) Why set yourself up for disappointment when it's not necessary? When it's about trying to reach goals and using compounding. Or are we just talking asset allocation here? If someone has a large portfolio consisting of bonds/stocks/cash/ and within that, stocks amount to say maybe 15% (or say stocks amount to 40 percent, but 25% are in index funds), well then maybe I could see setting a beat-the-index goal. But in this case, just reallocating more funds to the market from bonds/cash would seem to me less heart-wrenching and accomplish the same goal than trying to beat the indexes. For someone with an 90/10 stock/bond ratio, trying to beat the market is crazy if one's portfolio is already substantial.

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