I think with good domain knowledge and basic knowledge of economics and finance your average Joe can do better than the market. There's a lot of low hanging fruit in the stock market that a small investor in particular can grab because their size allows a certain level of under-the-radar activity.
I think you're a sucker for thinking the "professional" trader/analyst/bot on the other side is some kind of deity. Incompetence is endemic in almost every profession and finance is certainly not immune. The stupidity of so many big analysts is almost hilarious sometimes, I've made big predictions that counter the prevailing wisdom of 99% of people and I'm a total amateur. Like parent said, there's always low-hanging fruit out there.
For starters: when we talk about "the market" here originally we're talking about mutual funds + etfs.
Now back to the point. When I say average Joe I was probably understating things - I'm talking about your rational, generally college educated, sentient being. When I say basic knowledge of economics, I mean knowledge or intuition of how unemployment, interest rates set by the fed, and global events can effect the economy (mostly for getting out when things are tanking and jumping in when they are on the up and up). When I say general knowledge of finance I mean more specifically trading savy - types of trading (trend, value...etc), ways to trade (short, long, margin, leverage), ..etc. And when I say domain knowledge I mean generally the domain the person works in and can pick a winner from a loser.
Now with that knowledge, the fact that a small investor can make small moves and not effect the security itself, and subtracting management fees, you mean to tell me just because a finance company puts their stamp on a mutual fund that means they'll do better than me?
My returns and the returns of folks I know that fit that characterization disagree with you.
Buy and hold, not day trade, and I think you can beat the market. You don't have management costs. And buy and hold avoids capital gains that professional stock market traders will incur. You also have to do your homework--don't buy the latest fad, and don't chase performance (that's a guaranteed train wreck waiting to happen).
And, yes, I can beat the market. My 20-year investment history shows that I consistently beat the market. And, no, I'm not a professional stock market trader. I've worked as support staff at investment banks, and I can tell you first-hand that there are many reasons not to be a "professional stock market trader". The industry is a horrible place to work, and I'm glad to be out of it.
