Your only way to “Cheat” in the stock market?

The trick is, don’t own a single or just several stocks, while one could argue to pick an undervalued stock, and hope that it will increase in value in the near future. But let's admit this, nobody knows whether it will perform in any given months or years.

The way to ‘cheat’ in the stock market, is to actually own every single stock in the market, by owning the market itself or the low-cost index fund (S&P 500 as an example), through buying and holding for the long periods.


Take this graph from The Motley Fool,

As quoted:

Hold stocks for a year (Wall Street's territory) and you're at the mercy of the market's madness — maybe a huge up year, or maybe a devastating loss. Five years, and you're doing better. Ten years, and there's a good chance you'll be sitting on positive annual returns. Hold them for 20, 30, or 50 years, and there has never been a period in history when stocks produced an average annual loss. In fact, the worst you've done over any 30-year period in history is increased your money two-and-a-half fold after inflation.

Also about owning the market or index, as quoted by Warren Buffett,

The best way in my view is to just buy a low-cost index fund and keep buying it regularly over time, because you'll be buying into a wonderful industry, which in effect is all of American industry…People ought to sit back and relax and keep accumulating over time.

In short, own the stock markets by DCA approach, while the markets might move up and down in the short-term, but in the long run, the direction is very clear, UP!

So worry not about the next crash or the next bear market, just sit back and relax! 

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