It’s easy to match the overall market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized by Dexus (ASX:DXS) shareholders over the last year, as the share price declined 32%. That’s well below the market decline of 16%. Longer term shareholders haven’t suffered as badly, since the stock is down a comparatively less painful 15% in three years. Shareholders have had an even rougher run lately, with the share price down 31% in the last 90 days. But this could be related to the weak market, which is down 27% in the same period.

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In his essay The Superinvestors