[deshpand]

Technically, beating the market should be like being in the top 50 percentile of your class. The reason most big funds fail to do this is because they need to overcome the fees they charge, to match the market.

If you are investing yourself, you won't have the fees to overcome. You do need to be a bit careful around trading costs and taxes. Luck can play a huge factor too. If you have domain expertise in a specific sector, your chances of outperforming the market may go up a bit. You may be able to identify with greater certainty an opportunity to invest in a company that others haven't yet noticed. This can only happen with small companies. With bigger companies, it's hard for some outsider to possess some information that others don't have.

It's also a fine strategy, IMO, to invest in indexes and then focus your time on what you can do best or enjoy that time the way you see fit (for a few people, the latter can indeed be investing)

[DeathArrow]

>being in the top 50 percentile of your class

But will you do better long term than a passive index fund?

[deshpand]

Not easy, unless you have an ability to identify opportunities that others don't have (such as applying your domain knowledge on a new trend, as I mentioned). You may do better than the market (market == passive index fund == averages) sometime, and worse some other time. And over a long time, you may just end up matching the market, minus any fees. With a passive index fund, the fees will be tiny.