Perhaps overly generalizing, most everyone's portfolio is a poor approximation of the overall market with extra fees taking away even more -- hence the index funds tracking the overall market (or just the traditional top companies like S&P 500) will generally do better. When the market goes tits up, pretty much everyone will take a hit at the same time, index-fund holders and people with more specific portfolios alike. The people that won't be hit hard will be those with more "safe" investments (that don't outpace inflation...) like bonds, those who saw it coming and invested in negative-indexes, or those who get lucky with e.g. penny stocks / startups.