Over dozens of posts, we’ve reiterated a major theme on this blog, which is that even the most robust and sophisticated of strategies are tough to implement and stick with, and are likely to underperform the market a certain percentage of the time. Investment managers who can outperform by even a couple of percentage points annually are often household names.
However, a recent study of stock transactions by the same small group of people from 1985 to 2001 found “significant positive abnormal returns,” averaging outperformance of around +6% per year.
What narrow group of investors can consistently and legally outperform the broad stock market? Why members of Congress, of course!
