Find the best index fund you can, and let your money grow with the market.
If you want to get into things like individual stocks, or even angel investing, do it for the fun and the experience, but don't do it for the wealth. "Get rich slowly" is the best advice I've ever been given.
Number zero advice is to earn more and spend less. The former is at the mercy of your career but the latter almost entirely in your control.
Getting in the habit of saving 50+% of your net income leads to a very happy life as you'll quickly accumulate a true nest egg.
I've been "getting rich slowly" for 8 years, and boy let me tell you, it sure is slow. Definitely doesn't feel like my wealth is growing in index funds fast enough to retire within this life time.
http://www.macrotrends.net/2488/sp500-10-year-daily-chart
If the market hasn't been going up enough for you to feel good about your investments over the past 8 years, you are probably not saving enough to meet your goals.
Ha ha, I feel the same. But don't discount the fact that small percentage returns are actually exponential growth. (For example, 2% returns actually doubles your money every 10 years.) Just because it 'feels' like your investments are stalled doesn't mean that they are.
I wish! More like 35 years.
7% returns will double initial investment every 10 years.
Higher risk, higher upside, but perhaps the upside is disproportionately higher than the downside or the additional risk you are taking on, so you could be willing to invest in said company / asset / etc.
As a counterexample, I've done great on individual stocks when I really understood the company well. You generally get 2 to 3 good investment ideas per year, so you could go overweight into those ideas.
Stan Druckenmiller (who is an interesting person in itself with unconventional views) uses a similar strategy: https://www.youtube.com/watch?v=c6LgojkA6bo
And I'll add that the "best" index fund is pretty much the broadest fund with the lowest fees. For example, Dow Jones only has 30 constituents while S&P 500 has 500, so S&P is broader
I have been disregarding this very prominent advice since 2015. I am up over 200% since then, and up 40% YTD.
This is the same lame advice every financial advisor gives. It is even the advice Warren Buffett would tell you. However, Warren Buffett didn't get where he is today investing in ETF's and mutual funds, he invested in individual stocks.
I completely reject this notion that investing in individual stocks is some extremely difficult thing to do well. That you need to spend countless hours doing high level analysis of a companies financials, that is just plain false.
Seeing as how you don't know my strategy I don't know how on earth you could claim that.
>It also performs the same for everyone who participates
Maybe that is fine for you....it isn't for me. I want to perform much better than everyone else who is participating.
Doing well over 3 years in a bull market is not very impressive. If you can beat the market over 30 years and through bear markets then you're a force to be reckoned with.
>Warren Buffett didn't get where he is today investing in ETF's and mutual funds
None of us here are Warren Buffett. Most of us here are working full time jobs as software engineers, not investors.
It is a hell a lot better returns than simply investing in the S&P 500 for the past 3 years.
Show me a 30 year period where the market wasn't bullish. Bear markets are short lived, they key is just to stay in and not be stupid and sell.
edit to reply to your edit:
>Show me a 30 year period where the market wasn't bullish. Bear markets are short lived, they key is just to stay in and not be stupid and sell.
That's the argument for investing in an index. Individual stocks will come and go through these market cycles, but the index will average out ahead. If one is capable of predicting these individual stocks, power to them. You clearly think that you are one of these investing powerhouses and will not be convinced otherwise. Best of luck.
What is the basis of this prediction ? That index fund are more diversified that individual stock picks?
IOW, you've never known a down market.
This is the same lame advice every financial advisor gives. It is even the advice Warren Buffett would tell you.
It's all a conspiracy of the professionals, I tell ya! They wouldn't want you making the same returns they do, now would they?
he invested in individual stocks
Buffet bought/buys entire companies, or at least a large part of them.
I completely reject this notion that investing in individual stocks is some extremely difficult thing to do well.
Not that you'll believe me, but you might very well get your comeuppance. I mean, I hope not as I wish financial ill on few people. But you've had great returns only in a bull market, ignore the advice of professionals who have been doing this for decades, and you seem to think stock picking isn't all that hard. I, who has ridden the ups and downs of the market since the 80s, have seen this time and again where a sudden downturn or recession turns those "models" upside-down. The last one that stands prominently in my mind was the dot com bust. Everyone was "up over 200%"...until they weren't.
Anyone else reading can ignore this. Unless you want to make a hobby out of it, go buy S&P 500 index funds, like everyone tells you to do. Oh, sure, splurge $10K on some TSLA or AAPL once in a while if you're feeling lucky, but keep most of it in the general market. If you do wish to make a hobby of it, know that myself and everyone I've personally know who trades regularly has learned some hard and expensive lessons along the way. It's a good education, and you'll likely be a better investor for it, but it's not free.
(Disclaimer: I trade the hell out of individual stocks. Do as I say, not as I do. <g>)