If 90 Percent of Professional Managers Can't Beat the S&P 500, Why Do You Think You Can.

Active management is difficult to beat because most active US large-cap managers underperformed the S&P 500 over the last 15 years. These managers are full-time professionals with research resources and access to corporate information, yet nine out of ten still lost to a fund that simply owns everything. Retail investors considering stock picking face the question of what edge they have beyond a hunch. Sports betting provides a parallel: expected losses are built into the system, yet people still bet believing they have an advantage. Stock picking similarly competes against institutional pricing power already reflected in stock prices. The S&P 500 tends to win through concentration in strong performers and discipline that lets winners run while removing weaker positions.

"The S&P 500 wins through concentration plus discipline. Look at what you actually own when you buy SPDR S&P 500 ETF Trust ( NYSEARCA:SPY | SPY Price Prediction): NVIDIA at 7.58%, Apple at 6.66%, Microsoft at 4.91%, Amazon at 3.64%, and Alphabet's two share classes combined for over 5%. The index lets winners run and quietly removes losers."

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