My understanding of investing is this: you need to spread your money around lots of different asset classes in order to achieve true wealth. Some people will get lucky investing all their money into Facebook, Bitcoin, a blockchain technology company, or retirement home developer. But most people cannot pick individual stocks.
Thus the solution should be in spreading your money around to decrease your risk exposure across industries and markets. I like index funds, real estate, and private equity.
Money is like manure – spread it around so other things can grow.
A great investor needs to concern himself with long term wins. Always making money over the years regardless of what crazy situation the modern economy throws at you. Fear no bear or bull market. A great investor can make money or retain his money in the conditions Mr. Market creates.
Investing all your spare money into a primary home early in life isn’t a smart move. The home never puts money into your pocket. Alternatively living in a primary home is a luxury for the rich. A young single person or couple will create more wealth faster following the house hacking strategy rather than the American Dream strategy.
On stock picking:
Predicting if the market will be up in 5 years or down in 10 is impossible. Artificial intelligence will help make the best judgment decision for you. Further, 90%+ professional money managers never beat the market, and it’s their job to beat the market!
In my opinion, Warren Buffett’s famed value investing philosophy is the best approach to investing your money.
The Wealth Formula:
Make as much money as you can through your career and business(es). Invest that money into assets and other businesses until your passive income outpaces your earned income. Rinse and repeat this cycle (for mastery) for the rest of your life. Teach your wife and kids this system. Teach other people this system.