Terry Savage: Can You Beat the Market?

The recent volatility in the stock market has reignited a debate as old as investing itself: can you beat the market, and should you even try?

Financial columnist Terry Savage tackles this perennial question head-on, pointing to the past month's dramatic market swings as a stark demonstration of just how difficult it is to predict what stocks will do next. The turbulence has caught both professional money managers and everyday investors off guard, reminding everyone that market timing is a notoriously unreliable strategy.

The data consistently shows that the vast majority of actively managed funds fail to outperform their benchmark indices over the long term. According to SPIVA scorecards, which track fund manager performance against market indexes, most professional stock pickers underperform simple index funds over periods of ten years or more.

Yet the allure of beating the market persists. New trading apps and social media platforms have made it easier than ever to jump in and out of stocks, creating an illusion of control that can be costly. Savage notes that the emotional toll of watching your portfolio swing wildly during volatile periods often leads investors to make the worst possible decisions — selling low and buying high.

The alternative, Savage suggests, is a disciplined approach built on broad diversification, consistent contributions, and a long-term perspective. Low-cost index funds and exchange-traded funds remain the most reliable way for most investors to build wealth over time, precisely because they remove the temptation to time the market.

What This Means For You: If you're investing for retirement or long-term goals, the evidence is clear — trying to outsmart the market usually costs you money. Stick with diversified, low-cost index funds, keep contributing regularly regardless of market swings, and tune out the noise. Your future self will thank you.