Things like dot-com or real estate market bubbles happen. The subprime mortgage crisis was tons of loans in the form of collateralized bonds that people bought based on their $1 value, while borrowers could realistically pay something between 15 and 20 cents on these mortgages. It’s hard to call it an efficient market. Overall, markets are still not very efficient, but over the years, this efficiency obviously increases.

On the other hand, even slightly outperforming the markets – showing slightly better returns than the index – is a non-trivial task. In December 2017, Warren Buffett won a million-dollar bet. Back in 2007, he loudly stated that over ten years, a regular index fund would outperform the praised hedge fund managers, considering all their fees. And they have hefty fees: usually 2% of assets per year plus 15-25% of profits. As a result, the dumb S&P 500 index beat the funds of funds (have not been named publicly) by almost twice as much.