Saying you can't beat the market is like saying it's impossible to find a bug in a program because someone would have found it already. The market is only somewhat efficient, and they way it stays (somewhat) efficient, is if everyone is trying to make money.
Moreover, the returns of investors is not normally distributed (a lot of people flipping coins would result in a normal distribution). If you look at the actual distribution of returns, from not just the market, but from investors, you find there's a lot of kurtosis (fat tails) to the distribution. This implies that there are both more losers and winners than what a coin flip would imply.
Some of those winners are pretty clear: Berkshire Hathaway, Renaissance Technologies, 2 Sigma, Bridgewater, etc.
> So given that information why should most of us spend the effort trying to beat the market especially considering the low expense ratio on some really solid ETFs.
By managing your own money, you are inherently making asset allocations. Do I just invest 100% in SPY? That's a pretty bad idea, so even if you are just using low-cost index funds or ETFs, you are still actively managing your portfolio. You need to decide your asset type (equities, bonds, options, etc), your universe (S&P 500, Russel 2000, etc), your portfolio weights, and a host of other factors.
There is no such thing as just investing in the "market." Everyone is making an explicit or implicit choice, and that, of course, is the definition of active management.
Moreover, the returns of investors is not normally distributed (a lot of people flipping coins would result in a normal distribution). If you look at the actual distribution of returns, from not just the market, but from investors, you find there's a lot of kurtosis (fat tails) to the distribution. This implies that there are both more losers and winners than what a coin flip would imply.
Some of those winners are pretty clear: Berkshire Hathaway, Renaissance Technologies, 2 Sigma, Bridgewater, etc.
> So given that information why should most of us spend the effort trying to beat the market especially considering the low expense ratio on some really solid ETFs.
By managing your own money, you are inherently making asset allocations. Do I just invest 100% in SPY? That's a pretty bad idea, so even if you are just using low-cost index funds or ETFs, you are still actively managing your portfolio. You need to decide your asset type (equities, bonds, options, etc), your universe (S&P 500, Russel 2000, etc), your portfolio weights, and a host of other factors.
There is no such thing as just investing in the "market." Everyone is making an explicit or implicit choice, and that, of course, is the definition of active management.