Throwing in a slightly different view here - i know this piece of info "most active investors do not beat the index" has been bandied around a lot, but i'm not sure i believe it. I have not done extensive research on how the advice is derived but here's some thoughts: (1) most of the time this piece of info is promoted by people who have something to sell you (e.g. fund managers, index funds, insurance agents). Try walking into a barber and asking if you need a haircut. (2) The reality is that almost by definition (and almost mathematically), it will be highly unlikely and improbable that 50% of active investors beat the index (and 50% of active investors lose to the index). Imagine an alternate scenario: what if right now 30% of active investors beat the index - what happens? More money will flood into active funds, more fund managers will spring out, and the ratio will shift again. (2) In reality, EVEN if you buy index funds, you cannot beat the market - investment/brokerage fees eat into your returns, and if you're based in certain countries - taxes eat into your returns as well. (3) I suspect the data is derived from "fund managers" - while it's probably true that 80% of fund managers DO NOT beat the market, i dont see why individual investors should be deterred by this data. As individuals managing our own portfolios, you have no "boss" to report to on a monthly basis, you dont have to scared that your investors will start withdrawing money, you dont have to chase ridiculous returns in the fear that you will look bad if other funds do better, you can invest in small-cap companies etc etc. As smallish individual investors (say <100M), we have advantages and less constraints. Happy to hear further views on this.