Surprising news from the WSJ -- Small stock pickers beat S&P 500 and the pros

Investment Analysis Clubs Macro Economic Trends and Risks
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{{ The average individual-investor stock portfolio has risen about 150% since the beginning of 2014, according to investment research firm Vanda Research, which began tracking the data nine years ago. That beats the S&P 500’s roughly 140% during the same period. Vanda calculates the average portfolio by analyzing individual investors’ brokerage-account trading activity in U.S.-listed single stocks. The firm’s analysis excludes purchases of exchange-traded funds and mutual funds, along with transactions made through retirement accounts or investment advisers. }}

intercst

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So that’s why I have more money than I know what to do with!!! I didn’t think I was that smart.

JimA

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I’ll believe it when I can see the research. They referenced a company that was new to me and they did not link to the data at all.

Why should we believe this company? How do we know their data is not critically flawed? I went to Vanda Research’s home page (https://www.vandaresearch.com/) and there was no apparent reference to this research. I will note that this company appears to be an entity that sells data to individual and institutional investors - so they seem less than unbiased.

One easy way that the data can be flawed is simply Survivorship bias. How many of those investors since 2014 that had lousy performance remained a part of the study? Did they close their accounts? Move to a different brokerage? Stop authorizing or otherwise participating in the research?

Is the time they researched selectively biased? I noticed that the story mentions a lot of tech heavy investing - which did exceedingly well from 2014 through the end of 2021. Does the research include all of 2022? We don’t know since the research is not provided.

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