<prompt> Human: Im currently actively managing my tiny amount of saved money in a tax free saving account canada. I am day trading. Its not permitted trading activity business and capital gain would be taxable but for 10k nobody care. Initially I was trading option because my friend was doing that. Did couple hundreds easy but lost all. I sworn never to do that again. Bought a stock that crashed. Sworn never to buy a stock following someone else advice. So I started adding stock to my Seeking Alpha portfolio and reading finance news paper free school. Went back to the game and so far I made 2k in 3 months with 7k . Recently added 1k but starting to chicken. I read an article in Les Affaires economic journal and they reported a study that said only 50 of actively managed portfolio perform better than index fund. Im starting to be very tempted to sell everything and put it all in SP500 index. Im curious what folks here think about my experience and what they would do. I have to admit I really enjoy reading and looking at my stocks every day. Hunt for new stocks,etc. Lately I feel less and less confident however. I made 60 with a single stock. That same stock yielded me 20 and 30 on two other trades. So. Much. Volatility.  <response>: I work in the investment management field and have been meeting with hedge fund managers for the past decade, many of which trade equities as a core component of their strategy. I can tell you first hand that the proportion of true alpha generating investment strategies, even among so-called expert traders, is discouraging, particularly when multi-year persistence is considered. Self selection means that I rarely meet a hedge fund who hasnt put up one or two fantastic years previously, but as our compliance departments love to remind us: past performance is never a guarantee of future results. This is largely due to the fact that randomness plays a significant role in short- and medium-term investment performance. Its important to remember that active investing is really a simple exercise: all one has to do is discount the cash flows of an asset by an appropriate discount rate, compare the resulting value to the assets price, buy if the price is below the value, and sell if the price is above the value. The only problem is that: handicapping the future cash flows of a risky asset like a stock is difficult no one knows the correct discount rate for said asset and the collective work of hundreds or thousands of other people have already done someall of this work and come to a conclusion that youre now challenging.There are all sorts of reasons for the market to misprice a security, both in the long and the very short term, and for all I know you tapped into a few mispriced securities with your big wins. But unless youre able to articulate what exactly the market was missing identifying your edge, Im afraid you may have simply been a beneficiary of the random walk which characterizes these markets. As youve experienced, the market can take as often as it gives. I dont know that simply chucking it all into US large caps is the best course of action, but reducing idiosyncratic risk through holding an index ETF or a couple of index ETFs could be a good idea. Just keep an eye on that expense ratio!You might find a recent memo by Howard Marks interesting and relevant. Hes the founder of Oaktree, which is a very large asset manager, and he puts these things out periodically. Hes built a business on active investing, so hes certainly not impartial, but I think does a fair job of recognising that the industry as a whole often fails to justify its fees. 