A steady upward trajectory is the only logical path for the stock market because shares are proportionate ownerships in profit-making businesses, and over time profit accumulates.

A modest rate-of-return can accumulate a fortune over time. You don’t need to beat the market, do over-leveraging, or pick the best stock to be rich. You just need to earn a decent rate-of-return and let your money compound overtime.

Compounding has a snowball effect. It is just a tiny ball of snow at the very start, but it can turn into an avalanche over time.

If you decide to buy a stock solely based on price action, you cannot and will never have any faith in the company’s business.

Nothing wrong with buying high PE stocks; however, expected business growth must justify the high price.

The most important thing is to invest and buy shares in successful businesses. The second most important thing is to buy right and do not pay excessive amounts.

If you have some working knowledge of business and accounting and have a lot of patience to ride out market ups and downs, you can be a stock picker. You just need to understand that stocks are proportionate ownership of earning businesses.

Stocks are not market tickers represented by daily quotes but proportionate ownership of businesses and should be viewed accordingly.

It is a common misconception that if you diversify, you don’t need to learn anything. Just buy a bunch of stocks, and you will be good. Nothing can be further from the truth.