Newbie Investing Theory Question
I am having a hard time wrapping my brain around this concept, so I'll try and explain my confusion, and maybe someone can point out where I am mistaken...
It seems from recent threads I've read that everyone agrees 95% of mutual funds do not beat, or barely beat the overall market. From that, the advice is to often look to index funds as a relatively safe way of investing with low fees and a proven track record for success.
Why then, would someone invest in invididual stocks at all? By doing so, you are basically saying "I can do better than a mutual fund manager and beat the average" aren't you? If you truly can do this, why aren't you a large mutual fund manager yourself?
How can an individual investing in various individual stocks have an edge? Is he simply "getting lucky" to beat the average, or if not, why don't mutual funds - run by "experts" - perform at an equally high level every single year? Why this juxtaposition?
Thanks,
DeathDonkey
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