2. According to Piketty, the market is doing pretty well over time, so simply following it is perfectly ok.
That said, I've heard the best way to beat the market is to invest in undervalued, small, unglamorous and mostly unknown companies. Obviously, that requires some serious study and resistance to hype.
> That said, I've heard the best way to beat the market is to invest in undervalued, small, unglamorous and mostly unknown companies.
There's an almost opposite approach that has been beating the market at least in recent years, "dogs of the dow": the idea is to buy the large companies that no longer have much growth potential (I remember McDonalds and AT&T as examples). People like to own small companies that they can imagine making it big, so the market undervalues large, old, "boring" companies that generate steady returns.
The underlying idea is the same for both approaches though: find a human bias that makes people over- or undervalue certain companies, and do the opposite. If there's any way to beat the market, that'll be it - and even that will fall as more trading is done by impartial algorithms that're immune to hype.
2. According to Piketty, the market is doing pretty well over time, so simply following it is perfectly ok.
That said, I've heard the best way to beat the market is to invest in undervalued, small, unglamorous and mostly unknown companies. Obviously, that requires some serious study and resistance to hype.