Anyone can beat the stock market, new research suggests – By Geoff Colvin (Fortune) / July 11 2021
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Is it possible that ordinary individual investors, without the help of ultrafast computers or a PhD in math, can reliably beat the stock market?
Sixty years of Nobel Prize-winning theory say no, it is not possible. But just maybe it is. Ironically, the widespread belief that it’s impossible helps to make it possible.
To see how, recall a high-buzz stock market event last December 21, when Tesla became a component of the S&P 500. Research Affiliates chairman Rob Arnott and colleagues made a bold prediction: Tesla stock “is likely to underperform the market (S&P 500) in the year after entry” and “Apartment Investment and Management, the stock removed from the S&P 500 to make room for Tesla, is likely to outperform the index over the next year by as much as 20%.”
Today, just over six months later, the only flaw in that prediction is that it may have been too modest. The S&P 500 is up 17%. Tesla is indeed underperforming badly; it’s flat. Apartment Investment and Management (known as Aimco) is outperforming the S&P, and by way more than 20%; it’s up 44%.
CONTINUE > https://fortune.com/2021/07/11/how-to-beat-the-stock-market/
