<prompt> Human: First let me preface this post by saying Ive been a lurker here for awhile. Im a normal investor here. I buy index funds, pay down debt, and invest a healthy amount into a 401k. Ive always believed the adage to not try and beat the market. I know that statistically managed funds dont substantially over-perform the indexes. Ive heard 2 above market is considered crushing it. People here as well as several financial advisers have told me the same things.From time to time I see people get thousands of percent returns, way above the pitty 7 average return. Some vehicles Ive seen this in: Penny stocks - A friend of mine showed me his portfolio. He turned a few hundred into 7,000. Shouldnt this be impossible? If this kid can make all this money why isnt Goldman Sachs doing the same thing as him? They have the best advisers in the world. Hes the type who will sack 6,500, keep the winnings, play with 500, and turn it into 7,000 again. Real estate - A house in my neighborhood was sold as a fixer upper. The investor made 45,000 profit on a 200,000 investment in 3 months. Bitcoin - This has been up.I look at myself and am feeling like Im missing out. How are these people beating the market? What does the whole advice most active investors fail to beat the market mean? Is it: Out of 1,000 active investors most fail to beat the market. There are a few good ones who do, so the goal is to be one of the good ones? In the long run all of these people real estate, bitcoin guys, penny stocks and day traders will begin to incur losses that offset their gains and fail to beat the market? For the SAME LEVEL OF RISK AND EFFORT as buying an index fund most people will fail to match that return. Riskier investments such as bitcoin, fixer uppers, or penny stocks WILL outperform but have more risk. You better know what youre doingMy point is these guys make it look easy or at least like there is an alternative path to make money on the order of hundreds of percent, one that normal people can do? One that may involve more work then simply buying an index fund but it can be done. If its so easy why isnt goldman sachs doing it? Markets are so efficient that there should be no way to profit from any of this.Am I dumb or too conservative for just buying index funds and safe stuff.  <response>: Warren Buffet one of the richest men on Earth, and the patron saint of investors just won a million dollar open bet that he declared against any hedge fund manager willing to challenge him. It was index funds against cherry picked stocks by one of the biggest fund managers on Earth, and index funds won hands down. Investing and trying to beat the market is a gamble. You can have good days, you can have bad days, but play long enough and the house eventually wins. In my example we are talking about Gods in the financial world. The smartestmost successful investor on Earth bet on Index Funds. The other guy betting against him, basically said Im pretty good at basketball, Ill challenge Michael Jordan in his peak, because I can probably beat him, and then he promptly got his ass kicked. Realistically, put the vast majority of your investments into index funds. A good investor, making smart moves, should be the most bored man on Earth. If you can afford to invest a solid amount in your retirement, and meet all of your financial obligations, and still have a little left over to play with, then knock yourself. Day-Trade, play the market, have some fun. But dont for a second delude yourself into thinking you can beat the market reliably, or betting your net worth on it. 