How To Beat the Market Using Leverage and Index Investing
Most investors – even professionals – fail to beat the market. Can it be done? Perhaps. Here we’ll explore how to beat the market using leverage and index investing.
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Yes and no. Technically, yes of course it’s possible. Perhaps the most famous example is Warren Buffett. But you’re not him. Moreover, for the most part, his investing style provided excess exposure to the Value and Quality factor premia historically, nearly fully explaining his above-market returns.
For most investors, the answer to the question above is an emphatic “no.” It is well known that the vast majority of investors – even professional fund managers – fail to beat the market, even in bear markets. If you’ve arrived on this page, you likely already know that fact. I won’t delve into the details and the data too much, but I’ll provide a brief overview to set the context for the discussion below on how to beat the market.
