Mutual fund managers can never consistently beat the market. The truth is a mutual fund manager will be doing good if they match the market. While hedge fund managers can beat the market to invest in one is expensive and they do not only invest in stocks. If you are only interested in stocks there is one way you can match the market like the best mutual fun managers but using it will not allow you to beat the market.
Anytime they talk about how much the market went up or down they are talking about the S&P 500. So all you would have to do to match the market it invest in all the stocks on the S&P 500. That is 500 stocks though, and you have to have them weighted the same. Their is a much easier and cheaper option though. You can invest in an ETF (exchange traded fund). An ETF is like a mutual fund but there is no fund manager so it is cheaper. There are a few ETF’s of the S&P 500. While they are not perfect and there is some room for arbitrage you will be able to expect the same annual results with a S&P 500 ETF as you would the market as a whole.
This is a great strategy for people wanting to invest in the market as a whole. This also diversifies your portfolio. However you will only have large cap stocks and no small or medium cap companies so that limits the diversification. You could also invest in an ETF of the S&P 400 or 600 to invest in small cap and medium cap stocks.
The S&P has a historic average over 10% so with this strategy you should be able to average the same over the long term. Investing is risky and you should invest with caution. If this investment tanks though it will mean all the economy is going down. This is an easy method that even a beginner investor can use.