Why the "Best" Investors Still Fail

The luster of investing with ever-exclusive hedge funds may not be warranted.

Data compiled from Morgan Housel suggests that over the long run, these vehicles significantly underperform passive indexes. While the hedge fund universe has no shortage of known rockstars like David Einhorn, there are many more subpar managers who benefit from the outperformance of a few while actually trailing passive indexes by a wide margin.

There are many reasons this happens, but perhaps the most significant is the drag from fees, which is why we advocate taking the reins of your own investing future and buying and holding great companies for the long run.

If you're looking for some of these proven long-term investing ideas, let me invite you to read the Fool's brand-new special report: "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so just click here and get your copy today.

The article Why the "Best" Investors Still Fail originally appeared on Fool.com.

Austin Smith has no positions in the stocks mentioned above. Fool contributor Morgan Housel has no positions in the stocks mentioned above. The Motley Fool owns shares of Chipotle Mexican Grill and has the following options: long DEC 2012 $16.00 puts on Green Mountain Coffee Roasters and short DEC 2012 $21.00 calls on Green Mountain Coffee Roasters. Motley Fool newsletter services recommend Chipotle Mexican Grill and Green Mountain Coffee Roasters. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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