Historically, buying and holding companies with strong fundamentals have resulted in the best performance for the average investor. Stock picking and timing the market is hard even for professionals, so adopting a simple buy-and-hold strategy should do better for most people.
Let’s use fitness as an example, what if the question was: “What is the best way to get fit at the gym?” There are several different ways to do this, but generally, picking a basic training program and sticking to it on a consistent basis will give the best result.
Just like there is no need to come up with any crazy new exercises or programs, there is no need to look for crazy strategies or investments. Find companies or ETF’s with strong fundamentals or growth prospects and allocate a certain amount to each on a monthly or quarterly basis.
As long as you keep doing “the simple things, the right way” you will most likely be successful. The financial markets are engineered to go up over the long run, with small corrections over the short term. Keep that in mind at all times and it will help resist buying the tops and selling the bottoms.
As an example… even if you bought the very top of the S&P500 in 2007, you would be up almost 100% today.