Why is it so hard to beat the S&P?
Why is it so hard to beat the S&P? Short answer: a cheap, rules-based portfolio that never gets emotional quietly compounds while humans pay fees, hit frictions, and fight their own psychology. Scope & Definition “Beating the S&P 500” sounds simple: pick better stocks, time entries and exits, win. Yet decade after decade, most investors—pros included—fail to outperform that boring index. The tension here is necessity vs. benefit . You don’t need to outguess the market to build wealth; a low-cost index fund already captures the lion’s share of returns. The potential benefit of beating it is alluring, but the structural and psychological headwinds are stiff. What Can Be Proven / What Cannot Be Proven Proven: Costs, turnover, and taxes create persistent headwinds for active strategies. The S&P 500’s methodology continuously removes laggards and adds risers; cap-weighting leans into strength; and index funds keep fees razor-thin (of...