I have often heard the phrase "nobody beats the index" which made me wonder why so many people, that invest for the long term (say 20-25 years), diversify their positions so much? Why wouldn't somebody invest simply in one or two index trackers (say S&P 500 and FTSE Euro 1000) listed in their own currency?
I have seen numerous asset management companies that invest in a broad spectrum of different funds and ETF's but fail to beat the S&P 500 / FTSE Euro 1000. Is there a reason for this? Is a period of 25 years not long enough to "guarantee" a certain growth?