<prompt> Human: This is in response to a comment that was made exactly one year ago by uAlienm00se:He speculated that the market is headed for a crash, and it was a good idea to sell out of large caps over the next year and start investing in hedge positions to shield against the crash. He also speculated that gold is going to possibly drop to 850ounce, and it would be a good buy when it drops below 1050. I set a reminder to see where we are a year later.Well, guess what happened? No surprise here. The closing price of the SP 500 on 10212015 was 2018 2052. The closing price on 10212016 was 2141.The SP 500 is actually up 6 4.3 even after the tumultuous roller coaster ride weve had this year. Certainly, 6 4.3 pales in comparison to the raging bull market weve had where weve seen it soar 20 in one year. However, it is still a decent return. Periodically selling off during the past year would have resulted in missing out on those gains as well as possibly locking in some losses since we had a few months where the market fell and then rebounded.Gold did not go below 1050 once all year. The lowest it was all year was exactly 1050.80 on Dec 17, 2015. Today it is 1266. That being said, I still do not recommend gold as an investmentThe most prudent advice is, as Warren Buffett recommends, invest in low-cost index funds, and invest long term.Your buddy whos got a hot stock pick? Forget it. Some conspiracy theorist on reddit says the market is overvalued and headed for a crash? Not a chance. Buy index, hold long, dont try to time the market.SP Historical closing data source: EDIT: I had the original value wrong. It was 2052, not 2018.Assistant: I respect your post, however, a few things to note:There was a mini crash in JanFeb early this year where you could get about 50 off most large cap tech stocks when things troughed. Sounds like this guy was actually prescient. I made about 40 buying that dip whereas if I had walked away I would have lost a great buying opportunity. Look at names predicated on macro growth like nxpi during that period relative to where they are now. Same thing is true of semis or hardware stocks that are tied to GDP projections.This is a straw man analysis and although I see your point its also a bit misguided. I know plenty of people here in NYC who work at top buyside funds that outperform their respective indices year over year, and literally do nothing but work 14 hours a day owning their industry verticals. They spend their time doing nothing but meeting with senior management and mining every conceivable source for data. Your argument makes it seem like this does not confer an advantage when in fact their longshort funds are doing very well. I concede that for the vast majority of jokels aka armchair stock analysts the patterns they see are probably a fallacy of the mind, but your claim that people cant time short term catalysts in stocks is not applicable to the very best who make it their lifes purpose to do so. You will probably never see those people posting about their ideas on Reddit, but that doesnt mean they dont exist. My fear is you deter would be analysts with posts like this because they think, ah, I cant go into that field because everyone knows the value of active management is an illusion. For most it is, for a select group, it is not.Human: There is a lot of evidence to show that the majority of actively managed funds do not beat the market These are funds where the fund managers spend literally all day long doing nothing but analyzing market trends and trying to beat the market. Then you get to add their exorbitant fees of 1 - 2 on top of it, and it even further reduces the return.There are funds whose sole purpose is not to beat the market but rather to preserve capital should the market have a sudden drop. There is a bit more skill involved with these funds, and I would have to analyze their performance against a general bond fund without the actively managed expenses to really comment on those. However, of the funds that are trying to beat the market, many of them fail. The ones that do beat the market for one or two years typically cannot maintain their above-average returns year over year when invested for the long term.  <response>: I also think I remember reading an article that showed that managers performances were mostly not correlated with their performance history. That is, there are thousands of managers so its inevitable that you can find some that just happened to flip heads 10 times in a row... but hes just as likely to flip tails on his next flip as anybody else. 