Beating the Stock Market Can’t Be Done – Myth or Reality?

~ A Stock Market Entry and a Mindset Entry
​

If you’ve been reading stock market books and articles, you probably came across the idea that it's impossible to beat the market so don’t bother trying. And you may even have come across statistics that drive the point home.

This is why mutual funds and index funds are a popular alternative to buying individual stocks. I have nothing against funds per say, that’s how I was investing for a lot of years. It’s a hands-off and mostly worry-free way to invest. It frees up your time and your mind so you can focus on something that’s important to you, perhaps your family, your career, your business or your hobby.

There's a problem though (and a solution)...

The problem is that if you believe you can’t beat the index, what are the chances you’ll even try? What are the chances you’ll dedicate time and energy to getting good at something that is supposedly impossible? 

​But it is possible. Peter Lynch, recognized as one of the greatest investors, beat the S&P 500 index in 11 out of 13 years, when he was the portfolio manager of the Fidelity Magellan Fund from 1977 to 1990.  

Now before you say, BUT… he was a professional, I want you to know that it is possible for a person who isn’t a so-called professional. In fact, it’s easier for us because we aren’t limited the way big fund managers are. Moving small amounts of money is faster and we can buy stocks that they can’t. Plus, we aren’t tied up the way they are by the fund’s investment objectives stated in the prospectus.
​
It does take some learning, of course. But the point is that it is possible, as you can see here.

Disclaimer: we don’t know with 100% certainty whether these results will repeat in the years to come. It’s true that investing always comes with some element of risk. Flexibility, persistence and a belief in the possible – these qualities will go a long way.

The results above are from my personal account, but I didn’t do well from the get-go. One thing is certain, if I had believed the voices, I wouldn’t have made the effort to learn and I wouldn’t have trusted my instincts. If I had believed the myth, I wouldn’t have chosen to manage my investments myself, I wouldn't have aimed for the "impossible", and I wouldn’t have done as well as I did. It didn’t happen overnight, it happened over time. It started with a belief that it could be done.

If you heard that beating the market isn’t possible, or that your goal is unrealistic, don’t believe it. Instead, believe in your own aspirations, whether that’s to do well in the stock market, your career, your business, real estate, or anything else that matters to you. 

Believe you can and you’re half way there. That’s because when you believe, it primes your mind to find the way. You are drawn towards, you “happen” to notice, and you attract the opportunities that fit your belief, AND you increasingly concentrate your efforts and your actions in the direction of that belief.

It becomes possible when you believe that it is. 

Now don’t get me wrong. I’m not suggesting you go out on your own – cowboy style – unless that’s your personality preference and you're at your best when you do things that way. It isn’t my intention to cramp your style – what I’m saying is that it takes time and effort to learn. It’s like learning a new language. You won’t be fluent overnight. This is why I suggest you start small and simple. It minimizes your risks and it gives you the opportunity to get the basics right. You will build from there.

The myth is correct only if you believe it and you build your life around it.  

Instead, believe in your own aspirations and put all the chances on your side.