Earlier quoted context omitted.
No it doesn’t. The appeal of index funds is that they are perfectly average. Sure, beating the index every year is a challenge, but who cares about that? The game is making money turn into more money, not trying to get 1% more than the S&P for everyone except fund managers. Beating the index by a massive amount once pays for all the times you underperform it. Not to mention: hedge funds have beat the market very cons…
>real estate has a higher sharpe ratio over the last 100 years Does it really? Every home price index looks something like this: https://i.imgur.com/7fluMBz.png (If you can find a better one, please post it. This was just the first google result) If you wanted to plot stock market returns on the same chart, you'd have to make the Y axis log scale. Meanwhile max drawdown isn't all that much higher for the stock market…
where researchers tracked several asset returns since the 19th century across several western countries. While real estate and equities have similar absolute returns (7%) real estate returns are 4x less volatile, resulting in a sharpe ratio for real estate 5x higher than equities in a country like France, closer to 2x higher in the US, and just slightly higher in Australia - the rest of the measured developed countries fall in that range. In no country measured in the developed world are real estate sharpe ratios lower than equities on average annually over the last ~150yrs.