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>You may not be paying attention to what I am saying. The type of investment I advocated to Dragan -- the type that has worked for me, YMMV -- is mutual funds indexed to the performance of the overall stock market. These funds are very lightly managed, basically a matter of calculating the percentages of each stock to hold, not individual stock picks. What you describe probably applies to brokers who pick, or tout, individual stocks for you. I share your distrust of them, and that's one of the reasons I have done very little of that type of investing.

I would say that your technique is the safest approach for those wishing to partake in the stock market.
But what you're saying, by using this method, is nothing more than 'stocks historically go up over time and since I'm not privy to the machinations affecting individual stocks I will take advantage of index funds like these to benefit from that historical fact'.
At the same time, there is still risk. Take General Motors, for example, which is a component of the DJIA. GM's Waggoner has said flatly that declaring bankruptcy is not an option as far as he's concerned. Yet I can gaurantee you that major investors have been lining up at his door TELLING him to declared bankruptcy. And there's a very simple reason for this - big companies at low values always rise sharply when they declare bankruptcy. Why?... Because their OBLIGATIONS, most notably to employees (unions) and pensioners, become non-obligations. They can abrogate union contracts, they can terminate pensioner benefits like health insurance (and probably reduce pensions), cut contracted benefits for staff, etc. His inclination to 'do the right thing' keeps stocks lower than they could be. If he chooses bankruptcy the stock may see a blip, but I'll bet you that will be just enough to let the major investors sell off with marginally better return than today's value. But where will that leave GM after it's all done? The sell-offs will have helped the investors OUT but will leave GM in poorer shape than if they held firm on bankruptcy.

I'm no longer a fan of the stock market, nor of corporations.
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>Want to hear a funny (or not so funny) story on me? The biggest bet I ever made on an individual stock was on Borland in 1992. They had gone through a couple of slow quarters and Borland stock had fallen from 80 to 40 1/2. The market is nuts, I thought in my infinite wisdom. Basis of this decision? I thought Borland had better developer tools than Microsoft had. I took a few thousand dollars I had made on a lucrative consulting project the year before and bought Borland stock.
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>A year later, when it had fallen to 18, I sold. At least I got a bit of a tax writeoff for the loss....

I came close to that in my only venture into the stock market, mid-1970s. I got lucky though, and recocered my money. Had my wife not forced me to sell then I could have vmade a tidy sum about 10 months later.

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