Nicht gegen die besten Investoren an der Börse kämpfen, sondern die besten Investoren an der Börse für sich kämpfen lassen.

Charles D. Ellis

Watch a pro football game, and it’s obvious the guys on the field are far faster, stronger and more willing to bear and inflict pain than you are. Surely you would say, „I don’t want to play against those guys!“

Well, 90 percent of stock market volume is done by institutions, and half of that is done by the world’s 50 largest investment firms, deeply committed, vastly well prepared–the smartest sons of bitches in the world working their tails off all day long. You know what? I don’t want to play against those guys either.

But I don’t have to play against them. Instead, I can hire them — by buying an index fund. Then they all work for me for free, because stock prices express the best judgment of all the investors out there. Most of the time, those prices are approximately right, so most of the time you’ll be wrong if you second-guess them. Factor in fees and trading costs — not to mention taxes — and you have to do about 20 percent better than average before your costs just to match the index after your costs. Stock picking is a loser’s game, but Wall Street loves creating the perception that you can win at it.