As long-term investors, we all want to reach our goals as reliably as possible. That means earning the returns necessary to accomplish what's important to us, while enduring as little short-term pain as possible to get there.
Why, then, does so much money still support traditional "active" portfolio management - trying to pick outperforming individual stocks and bonds or hiring a professional to do it for us? Sure, some investors and some managers, some of the time, are able to accomplish this feat. But the odds of success are so low, no matter how we slice it, it seems almost delusional that you would invest in something other than an index or asset-class fund portfolio.
My guess is, beyond the "hope springs eternal" crowd, or the group that isolates one successful effort (amongst many additional failing attempts) as proof of their abilities, most people just don't know how bad the…