Many people are quite excited when it is their first time to dabble in investing. Their first experience in this field is usually through the many investment programs that their employers establish. They first get accustomed to the art of investing through their mutual funds and 401(k) plans. It is a good means of making a percentage of one’s earnings to get to work in the investment front. But it may not be the option to rely on for the more aggressive investor.

For the investor with dreams of beating the market, limiting one’s exposure to the investing game through mutual funds and 401(k) plans may not be the way to do it. It is highly unlikely that common investors may be able to beat the market like the big players do. They just have too many limitations with their own positions as common investors. Another reason is that they do not have the perks that many of the big players get to enjoy.

It is harder for the common investor to beat the market because the investment vehicles they commonly use do not directly engage into any particular market. Mutual funds for example, keep track of a broader index comprised of more than one markets. This is both to manage risk as well as to take advantage of the growth and progress happening in the different markets. But the result of this is that the mutual fund earns considerably less than directly investing on chosen investment vehicles. In such cases, taking bigger risks will give the investor a better chance of beating the market.

Another limiting factor that prevents a common investor from beating the market is the higher fees that they get to pay for getting into mutual funds. Essentially, mutual funds and 401(k) plans charge higher fees as compared to when an investor directly engages in the stocks, index funds and ETF’s. Another factor worth considering is that common investors don’t get to enjoy better control over the basket of investments that their mutual fund belongs to. They do not have the ability to decide over their investing positions, which is taken care of by the mutual fund manager in their place. While the convenience is there, it eliminates any slim chance that the common investor may have in trying to beat the market any time soon.

If the common investor ever has dreams of trying to beat the market, he or she needs to take a more direct approach to investing. This means trying to take on a more personal approach when it comes to deciding on what investments make up one’s overall portfolio. This may take a lot more work than usual and investors take on a higher level of risk. But this will result in investors having more control over their investments and have better chance of trying to beat the market, even though it may still be a long way off.