[btilly]

Actually my understanding is that investor performance is usually better than the market average, but not by enough to meet expenses. Therefore after market returns usually lose. Markets are not perfect. But the imperfections are small.

There was a study I saw a decade ago about whether any funds produced better results than chance. Due to the difficulty of modeling the possibilities, only mutual funds were considered. So people like George Soros did not get counted. In the end 2 names had performed high enough that, with 95% confidence, their performance was not by chance. Their names were Peter Lynch and Warren Buffett. Peter Lynch retired before he got to the 99% confidence.

Interestingly both Peter Lynch and Warren Buffett recommend low cost index funds for average investors.