...Now, of course, when the market is starting to look easy, everyone thinks they are an expert or a genius.
Congratulations for beating large-cap mutual fund managers over a few weeks, but until you have done it for a few hundred more, let’s ascribe your “success” to luck, and not double-down on the chances that your hot streak continues. It’s not just students, proud parents and others who are bragging about great returns, it’s a lot of investors claiming vindication.
And while the consensus among market watchers I talk with is that there’s plenty of room for the market to run now — though most would like to see a reset to knock valuations down a bit — the lesson that investors young and old should be taking out of current market conditions is not so much about “some strategies can beat the market for a little while” as it is that “good investors minimize their mistakes.”
Whether you are talking about the Stock Market Game or playing the stock market in real life, there’s a lesson that investors need to keep in mind at times like these: Don’t confuse a bull market with brilliance. Sure, the game teaches folks that they can beat the market. But it’s only a few participants — in the game or the real thing — that do. What real life proves is that you’re probably better off if you forget about “beating the market” for any long stretch of time, and simply make sure you are participating in it — with a balanced, cautious, diversified approach — for a lifetime."...read more
[By Chuck Jaffe - a senior MarketWatch columnist]
