# Is there any empirical evidence that it is possible to beat the market?

**URL:** <https://boards.straightdope.com/t/is-there-any-empirical-evidence-that-it-is-possible-to-beat-the-market/570591>\
**Category:** Factual Questions\
**Created:** [February 7, 2011, 11:38pm UTC](https://boards.straightdope.com/t/is-there-any-empirical-evidence-that-it-is-possible-to-beat-the-market/570591 "2011-02-07T23:38:34Z")\
**Posts on this page:** 4\
**Page:** 2

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**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\
**Post date:** [February 8, 2011, 5:34pm UTC](https://boards.straightdope.com/t/is-there-any-empirical-evidence-that-it-is-possible-to-beat-the-market/570591/21 "2011-02-08T17:34:47Z")

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> [@ralph124c](#):
>
> It is an interesting question, as far as my experience goes, I agree that you can beat the market, but not consistently or steadily-there will always be times when the market is down, sometimes for years (like the years 1929-1937).

Beating the market does not require making a profit. The definition of beating the market is to have a higher positive return in positive years and a lower negative return in negative years.

It could happen that the lower negative return is actually a positive, but that is rare. Losing 3% when the market is losing 8% is considered beating the market just as effectively.

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**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\
**Post date:** [February 8, 2011, 8:44pm UTC](https://boards.straightdope.com/t/is-there-any-empirical-evidence-that-it-is-possible-to-beat-the-market/570591/22 "2011-02-08T20:44:33Z")

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[And speaking of Warren Buffett…](http://www.gocomics.com/theargylesweater/2011/02/08/)

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**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\
**Post date:** [February 9, 2011, 1:18pm UTC](https://boards.straightdope.com/t/is-there-any-empirical-evidence-that-it-is-possible-to-beat-the-market/570591/23 "2011-02-09T13:18:43Z")

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Another question: does the FASB require that funds report their results in a uniform way? For example: Fund “X” starts the year with a porfolion of $2 billion. It ends the calendar year with $3 billion-is their return 50%?  
Or are they required to calculate their percentage return by tallying up all the transactions over the year, and comparing that return with the initail value at january 1st?

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**Author:** ![jbaker](https://avatars.discourse-cdn.com/v4/letter/j/59ef9b/32.png) [@jbaker](https://boards.straightdope.com/u/jbaker)\
**Post date:** [February 9, 2011, 7:21pm UTC](https://boards.straightdope.com/t/is-there-any-empirical-evidence-that-it-is-possible-to-beat-the-market/570591/24 "2011-02-09T19:21:30Z")

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Index funds generally outperform actively managed funds, but it may nevertheless be rational to use active management for a portion of your assets, see [http://knowledge.wharton.upenn.edu/article.cfm?articleid=2702](http://knowledge.wharton.upenn.edu/article.cfm?articleid=2702).

The Securities and Exchange Commission has detailed requirements, set forth in Item 26 of Form N-1A, [http://www.sec.gov/about/forms/formn-1a.pdf](http://www.sec.gov/about/forms/formn-1a.pdf), for calculating mutual fund performance data.

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