Maybe I need to make some background assumptions more explicit. Have you heard of reference class forecasting [1]? The "outside view" of historical results of similar activity is significantly more effective in predicting the results of your actions compared to using the "inside view" of analyzing the details of your plan. Everyone who chooses to buy and sell individual stocks does so because they think it's better than their other choices, so the proper reference class, by default, is "active investors as a whole". The average result of active investors as a whole is the overall movement of the market. Since that's what I expect any stock-picking scheme to yield, I might as well pick the least risky and lowest cost system for it.
Efficient market hypothesis has nothing to do with my opinions here. Whether or not it's possible to beat the market has nothing to do with it either. It's simple averaging - I expect than if I pick individual stocks, I'll get an average result for stock pickers as a group, and that average result is the same as the market as a whole.
Want to know my investment strategy? It's taking every dollar from working that's in excess of my expense budget, immediately putting it long a total stock market index, and sitting on it for about two decades. I don't look at the news, I barely look at the index price, and I'll continue doing this if I lose half my money over the next year. I'll get as good of an expected return, except paying less money in fees and leaving my deferred capital gains invested.
I bet the Japanese felt the same way 20 years ago when Japan was the second largest economy in the world... let me give you a great quote from a so so book:
"When you went to medical school did you ever want to graduate with a C average?” The doctor said, “No.” Vandergrift replied, “Do you want to send your kids to a C school?” He said, “No.” Vandergrift countered, “Then why are you doing that with your money? The S&P is an average. It’s an average of the 500 largest companies in the United States. It’s an average. It’s a C index. Why would you want to invest to get average returns?”
That's a generic anecdotal story that exhorts people to try to do better than average that could've been used as a response to anything. I'm not even sure that you're reading my posts other than seeing "pro-indexing" and trotting out random active investing arguments.
Reference class forecasting. Have you heard of it? Do you know that it reliably improves the accuracy of your predictions? What makes you a better investor than everyone else trying to beat the market?
Efficient market hypothesis has nothing to do with my opinions here. Whether or not it's possible to beat the market has nothing to do with it either. It's simple averaging - I expect than if I pick individual stocks, I'll get an average result for stock pickers as a group, and that average result is the same as the market as a whole.
Want to know my investment strategy? It's taking every dollar from working that's in excess of my expense budget, immediately putting it long a total stock market index, and sitting on it for about two decades. I don't look at the news, I barely look at the index price, and I'll continue doing this if I lose half my money over the next year. I'll get as good of an expected return, except paying less money in fees and leaving my deferred capital gains invested.
[1] https://en.wikipedia.org/wiki/Reference_class_forecasting