We’ve spent plenty of time explaining why investing in passive, low-cost index funds will out-earn actively managed funds in the long-run, and that most fund managers can’t even outperform the indexes they’re trying to beat over time.
The underlying theme of these posts is that stock market “experts” aren’t really experts at all. They may be able to get lucky over a short period of time, but the longer they invest, the less likely they are to continuously beat the market. (Even Warren Buffett says that most investors should choose index funds.)
But professional investors should have some real knowledge of beating the market, right? Isn’t that why they do it for a living?
Enter monkeys throwing darts.
The Wall Street Journal’s Dartboard Contest
In his popular personal finance book arguing that investors can’t consistently beat the market (A Random Walk Down Wall Street), economist Burton Malkiel says that “a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”
Sounds like a challenge.
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