Beat the Market: 6 Investors & Strategies Prove It’s Possible

How two investors and four simple strategies crush the market.

Image by Rawpixel from Pixabay

What does it mean to beat the market?

When you “beat the market,” that means your investing gain over a certain time period was greater than the gain of a common stock market index (usually the S&P 500) during the same period. Put simply, your return (for example, 10% last year) beat the return of the S&P 500 (9% last year).

There’s a wisdom among experienced investors that goes something like this:

“Your average investor is better off buying a low-cost index fund like the S&P 500 than trading his own stocks.”

This sentiment stems from the feeling that it’s difficult for the average investor to beat the performance of the S&P 500 over time.

As I shared in a recent article, the S&P 500 is expected to return an average of 7% — 10% per year over long periods of time: