I'm a fan of the Taleb approach to investing. Put most of your money (~90%, I would say )into bulletproof stuff (Savings Account, CDs, etc), and put a little into risky things. You should be able to get at least 5% ROI on the safe stuff (in the long run, obviously considerably less than that right now), which should guarantee that you'll never fall below middle class, come what may.
To counteract the current market insanity, I would strongly consider buying some inflation indexed government bonds (called TIPS bonds, in the US) with my 'safe' money. In case of inflation they could help, with no real risk (short of the collapse of the government). I know most people are worried about deflation, but I still have nagging inflation worries.
As for the risky stuff, I think Detroit real estate, corporate bonds, and some dividend issuing stocks are seriously undervalued right now. I personally put a little into NRF, which is issuing ~30% dividends per year (at its current stock price). Detroit real estate isn't likely to recover soon, but I think over the next two decades or so you could potentially make a killing.
I don't think that's Taleb's approach. His point is not simply to put a little into things like dividend issuing stocks. These might have a very good historical long-term return, but we cannot assume this will still be true tomorrow.
The point is to be exposed to good "black swans": far out-of-the-money options, or biotech and YC companies, for instance. These could potentially give you a very large return. In theory this would be already priced in, but too many people assume models which don't allow for very large returns.
That said, his main message is not so much how to make money, but rather how not to lose it all.
Under normal circumstances, I'd agree with you. But given the economic craziness right now, I'd say that (some) dividend paying stocks qualify at black swans. At least the market thinks so, because they value the shares so that annual dividends are 30+% of the share price. The market wouldn't allow 30% ROI per year into perpetuity on a non risky investment.
In fact, assuming that the risk free interest rate is at 2%, the Net Present Value of a $1 30% annuity is $15. Which means that the market expects that there is, approximately, a 90% chance of that company going bankrupt in the near future. (Having looked over NRFs books myself, I think that the chance is considerably less than 90%. Which means, I think NRF is undervalued by the market, and hence is a bargain).
To counteract the current market insanity, I would strongly consider buying some inflation indexed government bonds (called TIPS bonds, in the US) with my 'safe' money. In case of inflation they could help, with no real risk (short of the collapse of the government). I know most people are worried about deflation, but I still have nagging inflation worries.
As for the risky stuff, I think Detroit real estate, corporate bonds, and some dividend issuing stocks are seriously undervalued right now. I personally put a little into NRF, which is issuing ~30% dividends per year (at its current stock price). Detroit real estate isn't likely to recover soon, but I think over the next two decades or so you could potentially make a killing.