"I Want to Beat the Market!"

May 12, 2020

I have had many conversations that go something like this:


                                Me: “So, what have you done thus far to plan for your future financially

                                          and what do you hope to accomplish with your investments?”


 Prospective Client: “Well, I have a 401(k) through work and a Roth IRA that I contribute to

                                         occasionally but I know that I definitely want to beat the market!”


                                Me: “Hmmm ok, well what do you mean by “beat the market” and why is

                                           that the goal that you have set for yourself?”


Prospective Client: “I don’t know, I just heard from TV/Internet/Friend/Facebook that you

                                        should try to beat the market so I want to get at least a 10-12% return!”


                And therein lies the root of the issue. In my opinion, recommendations from loudmouth talking heads on TV or stock picks from your crazy uncle at the family BBQ are not solid investment choices. In all likelihood this advice is neither accurate nor is it beneficial for your personal situation no matter the source. Uncle Bob may have had good intentions when he encouraged you to buy that stock he said would explode, but it is probably not what is best for your portfolio.

                The same can be said of those who wish to “beat the market”. Of no fault of their own, they have been fed the line that in order to have success in investing and in life, one needs to “beat the market”. This is not an investment strategy and it is certainly not financial planning. In fact, the phrase “beat the market” isn’t even specific enough to begin with as it doesn’t specify an index that the investor wishes to “beat”.

                All of this to say that “beating the market” should never be your over arching financial goal. Your goals should be things like:

  • Retire at 60 to spend time with the grandkids.
  • Save up enough to move to Arizona and play golf when I retire.
  • Be financially stable enough that I can dedicate my time to charitable work in retirement.
  • Help my kids and/or grandkids pay for college or buy a first home.

Your goal shouldn’t be to beat an arbitrary index. Your goal should be to have the ability to do the things that are important to you. This is where planning with your advisor comes into play and discussing the life you wish to live becomes very important. Does this mean that you can’t beat the market? Absolutely not (more on that next week) but it is not the end all be all. Focus on the things that matter to you and not what you see on TV or Facebook. You will be much happier and a lot better off financially because of it.


Last week I included a link to a song that I am enjoying right now and about 99% of the feedback that I received was in relation to said song. I put all that work into writing a blog post and all you people care about is a song!? Fair enough, I’ll give the people what they want. From here on out I will include my “Song of the Week”! This week’s song comes from one of my wife’s favorite movies. Enjoy!



You’re the Best (around),




The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.