A Different Degree of Wealth

The Elusive Pursuit of Alpha: Why Beating the Market Consistently is a Myth

“Beating the market” is a term often associated with achieving investment returns surpassing the Standard & Poor’s 500 (S&P 500) index’s performance, a benchmark for U.S. stock market prowess. However, this challenge often proves elusive for many, if not most, investors. Why is this, you may wonder? Let’s delve into the factors that inhibit even the most seasoned professionals from consistently outshining the market.

Barriers to Beating the Market

  • Human Psychology: Investment isn’t just about numbers; it’s also about behavior. A common pitfall is buying high and selling low, often driven by market euphoria or panic.
  • Tax Implications: Capital gains taxes and other levies on investment returns can significantly reduce your profits. As a result, even if your raw returns surpass the benchmark, the post-tax scenario may paint a different picture.
  • Risks: While high risks might promise high rewards, they also carry the potential for steeper losses. To truly beat the market, one has to take on risks, but these can often backfire.
  • Information Asymmetry: Having superior information or a deep understanding of a specific sector can sometimes offer an edge. However, in an age where information is more accessible than ever, these advantages are thinning.


Historical data only reiterates these challenges. Even investing moguls like Peter Lynch and Warren Buffett, while having impressive track records, have had their fair share of challenges in consistently beating the market. It’s a stark reminder that luck can significantly sway investment success.

The Role of Survivorship Bias

Survivorship bias is a critical factor often overlooked when comparing the performance of active funds to benchmarks. Many of the studies only consider funds that have survived the test of time, ignoring those that may have been liquidated or merged due to poor performance. When we account for this bias, the real picture of active management’s underperformance may be even more stark than represented.

Importance of Diversification

One aspect that’s imperative when discussing investment strategies is diversification. While trying to beat the market, many investors put all their eggs in one basket, leading to significant risks. On the other hand, passive investing, especially via index funds, inherently offers a diversified portfolio, spreading the risk across multiple sectors and stocks. Diversification doesn’t just limit potential losses; it also provides exposure to various market segments, increasing the chances of tapping into high-performing sectors.

Chasing Long-Term Success, Not Alpha

While the pursuit of alpha (beating the market) is a tantalizing goal for many investors, data suggests it’s a losing game for most. Our own human instincts often get in the way, in addition to investment costs, taxes, and mistakes. The few who do manage to beat the market are either taking on significant risks or are simply lucky, which is not a sustainable long-term financial plan.

Instead of trying to “beat the market” a better plan is to have a plan. Implement this plan and monitor this plan on a regular basis. For more information on how to successfully navigate the challenges of investing, read chapter 5 of “Wealth on Purpose”, and know that when in doubt, out planning will probably serve you better than trying to win the investment lottery. If you have questions, give us a call.

Have a great weekend!

Source: Ballentine Capital Advisors 

Golf Tip of the Week

Major champ says these ‘simple basics’ instantly improved his putting

In some ways golfers can learn the most about putting from a player like Collin Morikawa.

Putting never came naturally to Morikawa like ball striking did. Whereas from tee-to-green Morikawa knew what he was trying to do, and what tendencies he needed to combat when things got off, Morikawa admits in our Golf Digest interview (which you can watch here) that he felt lost on the greens. Even during the good times.

“I’d putt well and I didn’t understand why. I’d putt poorly and I didn’t understand why,” he said.                                                                                                                                          

When Collin decided to tackle the issues he was having on the greens, his task was in some ways simple: To get educated. He added a well-regarded putting coach, Stephen Sweeney, to his team, and got to work.

“For me it comes down to knowing what putting even is,” he explains. “What are the basics?”

Morikawa has made great strides in his putting ever since. He collected a win at the Zozo Championship last week, and speaking to Golf Digest earlier this year, he explained what those “the simple basics” were, and what we can learn from them.

1.”The basics of setup”

One of the things Morikawa came to understand was that his fade tendencies were showing up in his putting—with much worse results.

“With a full swing, if you start your ball left you can fade it back,” Morikawa’s putting coach Stephen Sweeney says. “If you start a putt left, you’re missing left.”

The root cause, Morikawa and Sweeney quickly realized, was that the two-time major champion’s shoulders were too far open. Generally speaking, that’s what happens in putting strokes. Golfers’ arms follow their shoulders, which meant Morikawa was pulling putts left.

To ensure everything was moving in his intended direction, Morikawa developed a simple drill: He’d get in golf posture, drop his arms down so his palms were opposing each other, then take his setup. It squared his shoulders every time, which put his stroke on a better path.

“My shoulders were open, which felt square, but it meant my stroke was getting a little off,” he said. “If you can at least get a good setup, it becomes so much easier getting the putter back to square.

2. “The basics of focus”

Another putting breakthrough for Morikawa was realizing that he was spending too much time and energy focusing internally. Whereas from tee-to-green, Morikawa would focus almost exclusively on the target—on where he wanted to go­—on the green, Morikawa locked into what he was trying to do. That was a mistake.

“The best players aren’t thinking about hitting it exactly this hard. They’re feeling it,” he said.

To help with this, Morikawa decided to ditch practice strokes, and instead focused on three different points of the putt:

  • Where he wanted the ball to start
  • Where he wanted the ball to apex
  • Where he wanted the ball to enter the hole

The combination of these three things helped him read the putt more accurately, and rather than trying to focus on replicating the putting stroke, Morikawa plugged more into the target. And his putting was better for it.

Tip adapted from golfdigest.comi

Recipe of the Week

Smoked Gouda and Roasted Red Pepper Grilled Cheese

4 Servings


  • Eight 1/3- to 1/2-inch-thick slices Pullman bread
  • 4 ounces smoked gouda, very thinly sliced with a cheese slicer
  • 4 slices muenster cheese (about 4 ounces)
  • 1 medium jarred roasted red pepper, drained, dried and thinly sliced 
  • 2 cups baby arugula
  • 6 tablespoons unsalted butter, softened


  • Lay out 4 slices of the bread on a work surface. Layer each with some of the smoked gouda, 1 slice of the muenster, a thin layer of sliced red pepper (about 2 tablespoons), 1/2 cup of the baby arugula and another layer of smoked gouda. Close the sandwiches with the remaining bread. Thinly and evenly spread the butter on both sides of the bread using about 1 1/2 tablespoons of the butter for each sandwich.
  • Place 2 sandwiches into a medium nonstick skillet over medium heat. Cover the skillet with a lid and cook until the bread is evenly golden brown, about 2 minutes. Flip, cover again and cook until the bread is golden brown and the cheese is visibly melted, about 2 minutes more. Repeat with the remaining sandwiches.



Recipe adapted from Foodnetwork.comii

Health Tip of the Week

9 Things You Can Do to Prevent Carpal Tunnel Syndrome

If your job or favorite hobby puts strain on your hands and wrists, you might wonder if you have carpal tunnel syndrome. Maybe you’ve got some symptoms, like tingling or numbness in your fingers, and you want to make sure it doesn’t get worse. The good news is that there’s a lot you can do to protect yourself and prevent your symptoms from getting worse.

Carpal tunnel syndrome is caused by pressure on your median nerve. This nerve gives you feeling in your thumb and all your fingers except your pinky. When the median nerve goes through your wrist, it passes through a narrow path — the carpal tunnel — that’s made of bone and ligament. If you get any swelling in your wrist, this tunnel gets squeezed and pinches your median nerve, which causes your symptoms.

There’s no one, surefire way to prevent carpal tunnel syndrome. But if you reduce stress and strain on your hands and wrists as much as you can, you may keep it from getting worse.

1.Try a Softer Touch

Often in our daily routines, we get so used to doing things a certain way that we don’t even think about it. Many times, you may use more force than you need to get the job done. For instance, you might grip your tools too tightly when a firm hold is plenty. Or you may pound your computer keyboard when gentle keystrokes will do.

As you go through your day, keep an eye on how tense your hands are and how much pressure you put on them. If you can back off even a little, your hands and wrists will thank you.

2. Give Yourself a Break

Step away from your work to bend or stretch your hands. A 10- to 15-minute break every hour is ideal. This is especially important if you use tools that vibrate or make you apply a lot of force.

3. Stretch Often

When you take those breaks (or any time throughout the day), try this simple stretch:

  • Make a fist
  • Slide your fingers up until they point straight out
  • Repeat 5-10 times

Or this one:

Make a fist

Release your fingers and fan them out. Stretch them as far as you can.

Repeat 5-10 times

4. Stay Neutral

If you can, avoid bending your wrist all the way up or down. When you keep your wrist in a straight, neutral position, it takes the pressure off your median nerve.

Wearing a wrist brace when you sleep can help you do this. It might also help to wear it during activities that trigger your symptoms.

5. Switch It Up

Try to avoid doing the same hand and wrist motions over and over again. For example, if you have a task that you always do with your right hand, do it with your left instead. Or, mix up your tasks as much as you can to give your muscles a break.

6. Watch Your Posture

While it’s natural to focus on your wrist and hands, how you hold the rest of your body can also make a difference. Poor posture may cause you to roll your shoulders forward. This sets off a chain reaction that shortens your neck and shoulder muscles, crunches the nerves in your neck, and makes wrist problems worse.

7. Stay Warm

It sounds simple, but it makes a difference. When you’re cold, pain and stiffness get worse. Even gloves with no fingers can be helpful because they keep your hands and wrists warm and loose.

8. Talk to Your Supervisor

If your work triggers your symptoms, ask you manager about changing up your work space. You may be able to alter anything from your workstation setup to tool handles to how tasks get done to see if it helps your symptoms. You might also be able to trade off with co-workers so you can avoid the same task over and over.

If you work at a computer, try these things:

  • Adjust your keyboard position so you don’t have to bend your wrists when you type.
  • Keep your elbows close to your side as you type.

9. See an Occupational Therapist

This medical professional may be able to:

  • Show you exercises to help stretch and strengthen your hand and wrist muscles
  • Show you how to change your routine motions in a way that eases stress on your hands and wrists

Tip adapted from WebMD.comiii 

Copyright (C) 2021.  Ballentine Capital Advisors.  All rights reserved.

Our mailing address is:  

Ballentine Capital Advisors
15 Halton Green Way
Greenville, SC 29607


Can Anybody Beat the Market?

94% of US Fund Managers underperform S&P 500 over 20 years

More Evidence That It’s Really Hard to ‘beat the Market’ over Time, 95% of Finance Professionals Can’t Do It


Ballentine Capital Advisors is a registered investment adviser. The advisory services of Ballentine Capital Advisors are not made available in any jurisdiction in which Ballentine Capital Advisors is not registered or is otherwise exempt from registration.

Please review Ballentine Capital Advisors Disclosure Brochure for a complete explanation of fees. Investing involves risks. Investments are not guaranteed and may lose value.

This material is prepared by Ballentine Capital Advisors for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation or any particular security, strategy, or investment product.

No representation is being made that any account will or is likely to achieve future profits or losses similar to those shown. You should not assume that investment decisions we make in the future will be profitable or equal the investment performance of the past. Past performance does not indicate future results.

Advisory services through Ballentine Capital Advisors, Inc.


Share This Article


Newsletter Signup

* indicates required

Newsletter Archive