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I'mramer friends. I'm just trying to make you money. My job is not just entertaining, but I'm doing some teaching tonight. So, call me 18003bc. Tweet me. Let me tell you why I do this show and why I wrote how to make money in any market. For most of my life, pretty much everybody in America recogn that picking individual stocks was a fantastic way to get rich as long as you did it right.
Not everybody agreed on the right way to do it. In fact, everyone was certainly worth doing. Then the bubble burst in 2000 and picking individual stock of index fund supremacy. Almost legions of experts backed up by an endless not investing journalist came out of the woodwork that you were either too stupid or too improved to manage your own money.
They claim that it's more or less impossible to consistently beat the market. You might just park all your money in an index fund that bears one of the major actors like the S&P 500. The more extreme index fund absolutists like to say that no one can consistently beat the market. And if anyone looks like they can or say they can, it's pure luck.
That means picking individual stocks is nothing more than gambling where you have no edge. So why not settle for an index fund that can consistently give you 8 to 10% annual return? Sure, you won't get rich, but you'll steadily make money over time. I like that financial crisis that arguing. This is the ideology though that is absolutist and for that I think it's wrong.
I've been fighting since mad money first went on the air. Why? Because as I explained and how to make money in any market, it doesn't work. If you're willing to do the homework and it's never been easier to learn about the companies behind your stocks, individual stocks can change your life. They can make you rich in a way that no index fund ever could.
And it happens. I have seen it endlessly with my own eyes. And hey, it's absolutely possible to beat the averages. Take the S&P 500 that benchmark the whole benchmarks. There are 500 stocks in the S&P. Most of them are not all that good. In fact, at any given moment, I don't think there are 500 good stocks in the entire market.
So, when you buy an S&P 500 index fund like this, the SPY, you're buying the good or the bad. Which brings me to the unbarnished truth. you will most likely not just index funds. That's why I still recommend putting 50% of your savings in index fund. I'm a believer, but that's purely as a hedge against the mistakes that do inevitably occur when you manage your own money.
15 stocks is higher risk than owning an index fund. So, you need the index half as backup. But at the end of the day, an S&P 500 index fund is really an amalgamation of a few good stocks with a lot of mediocre ones and plenty of bad ones. The stocks of freshers regularly get out of the index, but they're still outweighed by everything else.
And that's the crux of my argument. If you follow your nose, eyes supremacy wisdom. Simple. There's a whole industry of financial aast regular people. I'm not saying this to like the professionals are out to get you. Even if they wanted to help you, they can't because you're not rich enough. In my years at Goldman Sachs, I spent a lot trying to find billionaires to buy and helping regular people with their money.
They call it elephant hunting. We were looking not for families with hundreds of thousands or or even millions of dollars, but with hundreds of millions of dollars. And this was back in the 80s when a million bucks went a lot further than it does now. It takes just as much time to service someone with a small goal as it does to help the oligarchs.
Which is why these firms devote so much time to helping the extraordinary wealthy. so little time to help everyone else. Unfortunately, our financial regime in this country is actually a lot like our healthare system. It's impenetc. It's the best they can do under the circumstances, but you can do better on your own.
as long as you're willing to put the work in. While I respect index funds for what they are, they'll never give you enough juice to get you really where you need to go. It's a bit of insurance against your individual stockfed like maybe gold or even crypto. The S&P 500 is the average choice. The the index are not selected for their greatest.
They're selected because they mirror American business. The keepers of the index don't put a premium on growth stocks even though stocks have historically been the best performers. Again, I don't blame them because that's not to blame. But I do blame the people who insist that index funds are the best you can do.
While there are some growth indices out there, I don't want you to own good growth and bad growth. I only want you to try to find the best growth companies. Those are the ones that historically speaking are most likely to make you rich. Sticking through with the index funds will only make you average.
Of course, it's better to be average and broke, which is why I still adise putting half of your savings in an index fund like this, but you need to use the other half to go for bigger gains. Unlike most professionals, I see the world as divided between two kinds of risk. the very real risk that comes from losing money in a bad stock and just as real risk of missing out on a great stock that can give you a 1,000% return over time and transform your entire unexist and how to make money in any market.
Putting some money in an index fund isn't bad advice. It's a good way to play it safe. But most people can't afford to purely play it safe unless they're already rich. Which is why you have to put the other half of your holdings in the mix of individual stocks that you use in a nonstop hedge. How to pick them? Stay tuned. You'll find out. It's going to
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