Killer investment advice on TV

Both. It may indeed be possible to beat an index, but these ads are scams. You said it yourself below:

-Will

Both. They are trying to scam you out of $29.95. But it is also possible to beat the index. But barring a run of luck, it takes a lot of study, an expensive education (bought by making and learning from mistakes), and finding a market nitch (some kind of trading/investing where you have an advantage over other traders/investors).

Yep.

-- Doug

It's not that you can't, it's just very unlikely. There is far more evidence to agree with this statement than disagree. If the long term return of the market is 10%, I've seen many studies that show the typical investor manages to see 3-4%, not due to fees, but bad timing. Getting in at tops, out at bottoms, etc. If I can get 9.9% over that period I pat myself on the back.

The market is not 100% efficient. It's possible to study a number of stocks to discover those which are undervalued, but this takes time, patience, and a lot of discipline. Cramer is quoted as saying that you must be willing to devote 1 hour per week to follow each stock you own. For most people, this implies you can't own more than 10-15 individual stocks. If one or two goes up 5 fold, it's a nice return, but only a small fraction of your portfolio. If one tanks, likewise.

If I knew how to double my money annually, I'd be selling the method for millions, not $30. Risk follows reward. Any return above the averages requires some level of risk. Even my comments above don't suggest that level of return. If your really good, a small premium to the market, not

JOE

go read elaine at

I also read the worlds gonna end in early-August so I'm not too worried about it.

Stone,

Try googling "efficient market hypothesis". Under the hypothesis/ theory (there's still some debate, I believe) there are levels of efficiency. All levels except for the perfectly efficient level allow for minor inefficiencies in the market to be exploited (few argue that we are in the 'perfectly efficient model').

This suggests that you can "beat the market". But as everyone else here said, its very hard to do and worth a whole lot more than $29.95. Oh yeah, and once a method becomes common knowledge, it gets incorporated into the market movements and it no longer works as well (or at all). Doesn't that stink!

If you could systematically beat the market, it would be insane to tell everyone for $29.95.

Like the other replies, I think that you can beat an index fund that comprises all stocks.

Yes, its a scam. But, it is possible to beat the index.

Just read the Random Walk book or one on contrarian investing to get a better idea on how to increase your investment skills.

For instance, foreign stocks are doing better than domestic stocks, so buy some EWY. And, of course, energy stocks will continue to do better than average.

-- Ron

I hope this is a tongue-in-cheek quip given your Jan 2 '07 post:

"On July 6, 2006, I made a claim in this news group that XLE would be up

The S&P is up 11.33% and XLE is up 2.01%, just the opposite of what I predicted. I am just lucky that I am diversified in my investments."

In the last 6 months, XLE has outperformed. Maybe you were just 6 months early on a good prediction. I guess timing is everything. JOE

It takes a long time to establish a trend, and new technology can change everything.

Currently oil peaks in the late summer because of added travel, so an annual change is better judge of enery stocks.

-- Ron

perhaps I was off with my comment by five days, nevertheless, I stand by my original warning

I *did* try to give you a warning about the markets

You're still a little early, a "substantial correction" (as you predicted) has not yet occurred. Although it still could...

-Will

I was just clownin around with ya.

I'm a buy and hold investor so I really don't care about short term corrections. IMO, I don't believe this is a "correction" anyway. Just as markets can get overly "pumped up" by investor sentiment, they can get unjustly supressed. I think the media is using fear to instill the later scenario.

Most of our volatility has been subprime mortgage and credit crunch worries. When looked at logically, the subprime loss will only be about 1% of the mortgage market. Furthermore, mortgage backed Securities only make up a small percentage of the total market. The "correction" shouldn't have even been noticed.

Hedge funds and traders have overinflated the seriousness of current events to scare everyone and create volatility. The aforementioned groups profit from volatility regardless of overall gain or loss.

you're only at the start of the drop.....