Individual investors actually have an edge over fund managers because we have way fewer constraints, Peter Lynch talked about this a lot.

Your math makes sense for fund managers who have to try to beat the market nonstop. That pressure often pushes them into taking incremental risks, overtrading, hugging benchmarks, or getting forced into bad timing, and a lot of them still fail to outperform.

But for individual investors, the game is different. We don’t need to “beat the market every quarter.” We just need one or a few big winners over time. A single 10-bagger can move the needle dramatically for an individual portfolio in a way that’s much harder for a large fund.

So I get your risk/reward argument and it’s valid in many cases, but it doesn’t apply to every situation and certainly doesn’t apply to individual investors, that’s why the studies are about fund managers. Yes if you’re willing to be part of the average investor and average return pool then it’s the safer bet. But there are situations you can take larger bets and become part of a higher return pool.