In a 30-year study, 9 out of 10 funds underperformed the S&P 500 index due to frequent trading. Amateurs have the edge over professionals in outperforming the market. S&P Global’s SPIVA report shows only 9% of actively-managed large-cap funds beat the S&P 500 in the last 20 years. Increased trading frequency leads to weaker returns.

Professional fund managers struggle to beat the S&P 500, with a 73% average annual turnover rate for U.S. large-cap mutual funds. The lesson learned is that holding stocks long-term outperforms frequent trading. Stocks like Palantir, AppLovin, and Carvana have surged over 2,000% in the last three years by holding onto winners.

While buying and holding is proven to be a successful strategy, professional fund managers often trim winning positions for portfolio rebalancing. Regular investors can benefit from holding onto winners and avoiding excessive trading. Not every investment will be profitable, but holding winners long-term can lead to significant returns.

The Motley Fool Investment Philosophy recommends holding stocks for at least five years and letting winners run to maximize returns. By buying shares of high-quality companies and holding onto them, investors can outperform many actively-managed funds. The key is to resist the temptation to sell winners prematurely, as they can significantly boost portfolio performance.

The Motley Fool Stock Advisor team has identified 10 top stocks for investors to buy now, excluding Vanguard S&P 500 ETF. Past recommendations like Netflix and Nvidia have generated significant returns. Stock Advisor’s total average return of 1,036% outperforms the S&P 500. Join an investing community focused on individual investors for potential high returns.

Read more at Yahoo Finance: You Can Outperform Around 90% of Professional Fund Managers by Using This Simple Investment Strategy