What Is “Breaking The Market”
If I’m going to have a blog about “breaking the market,” I think it’s only prudent to define the term to begin with :). Some people hope to get 50-100% returns in a year. They see an informercial on TV about people turning a couple thousand into millions and think they could be them.
Quite frankly, these people are delusional and only end up getting defrauded or losing their entire investment. To me, breaking the market just means beating the market consistently over time. So, if the S&P 500 returns about 10% on average over 5 years, breaking the market would imply 13% returns or better. If the S&P was up only 4% over 5 years, gaining 8% is definitely amazing.
Beating the stock market isn’t easy, but it can happen. With the right amount of discipline, smarts, and sometimes just plain luck, it’s entirely possible to beat the market.