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Your strategy sounds like "pick winning stocks"? A strategy which has been show to produce (on average) worse returns than index investing.

Index investing has produced a ~200% return in the past 15 years (from 2007 peak to now). Not sure what you mean by "a chance of seeing a profit in your lifetime".



There's a third strategy of "index minus bullshit stocks" where you would include both INTC and AMD stocks for risk hedging, but would leave out things with questionable sustainability like Uber and Netflix that otherwise made it into the index due to the speculative value.


More or less. Of course, I am advocating to leave out any company where it does not fit this criteria: " are generating a lot of cash and a lot of profits, have a moat/USP/technology advantage, and are at the forefront of where the world is headed in terms of trends, or at least are following a sustainable trend".


This strategy would miss some huge and unexpected gains. Tesla comes to mind (at least for the time being...)


On other hand it also avoids Tesla when it inevitably crashes to same ballpark as other automotive companies... No I really believe it is nothing special and will eventually come down.


There's a third strategy of "index minus bullshit stocks"

That's just stock picking but in reverse.


You can try SPLV or similar but you miss the bubble inflating with these.


There are plenty of value or dividend funds if that’s your philosophy


No, it sounds like picking winning businesses. Big difference. Warren Buffet has said that he's a business picker, not a stock picker.


Warren Buffet buys a controlling position and changes how companies operate. He himself said "Your average investor should just invest in indexes".


Yes, that is it essentially. You are looking at businesses which have cash flow and the other criteria mentioned above.


So your advice is to be Warren Buffet?


200% in 15 years didn't keep pace with my house assessment from county tax lady. And I got to use my house!


Kind of the opposite of diversification though. Houses burn down and neighborhoods change, sometimes for the worse. I knew someone that bought a house in 1972 for $70,000 and sold it in 2015 for about $70,000. Real estate is not all roses and candy.


Parent has literally no idea what he's talking about. Investing in indexes has always worked. Always. Over all time periods. Since they existed.


All 20-30 years? Believe it or not, the history of investment spans more than the last 25 years. Also, there are some questions regarding the liquidity of ETFs during a major crash/selling session. It’s possible there could be a feedback loop of selling to deal with cashing out that results in price of the ETF going below net asset value.


Well indexes are a relatively new product (less than 100 years old).




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