Are you among the many investors who are wondering why they’re not beating the markets? After all, the Fidelity Magellan (FMAGX) mutual fund was able to do it – why can’t you?
Fidelity was able to do it because it had the brightest minds in the industry, and it had the resources to higher the best. But the days of the fund outperforming the market are mostly a memory – in the last 10 years, 62% of its competitors provided higher returns, says Morningstar’s Scott Burns for MSN Money.
What happened? Why hasn’t Fidelity, with all those brains, resources and experience, been able to pick a winning manager?
The answer is simple: the odds of beating the market are slim, no matter who is doing it. It doesn’t matter if it’s you or your fund manager. And the average fund manager only stays at a particular fund for about four and a half years. By that measure, a 30-year-old may have to make a decision about a mutual fund six times before retirement, and a few more times after retirement. And the odds of making two good choices in a row is a scant 9%.