Re: Another book question
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Beating what market? What index???
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Vanguards Small Cap Index fund has returned an average of 7.5% a year the last 5 years. It's small cap value fund has returned 12.66%. These are pre-tax returns.
Since I started investing full time 5 years ago, my "after tax" returns have beaten indexes pre tax returns by 30% per year.
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The truth of the matter is that someone is always going to be beating their benchmark. A good example of this is top performing mutual fund listings. The top performing mutual funds in their respective categories is never an index fund but its virtually never the same fund year after year.
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This isn't one lucky year. I beat the indexes every year. My worst year is north of 30%.
Is it because I'm a genius? Far from it. Is it because I know something others don't? No, I just use Graham's and Buffett's techniques. One advantage is that unlike most individual investors I am able to work at it full time.
But most importantly, I have a small portfolio. It's so small that when I started, I need 20% returns just to feed my family. So you might say I have all the correct incentives, and all of the best options.
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