Many analysts predicted sluggish growth for years. Suddenly, in the middle of the decade, everything took off like a rocket. We'll be just as surprised by what happens during the next 10 years. Every time you think you've finally learned rules, someone changes the game. As investors, we habitually confuse strategies with outcomes.
Outcomes are pure hindsight.
Strategies are decisions you make when you don't know what the outcome is going to be. As a strategy, however, you need to diversify over the entire market, because you have no idea which stocks will lead the next wave up. Individual stocks aren't enough Individuals can't and don't diversify when they buy individual stocks. You'd have to own 50 stocks or more, of different sizes and in different industries. In real life, we tend to buy the most popular stocks, representing the industries that have recently done the best.