Quality Stocks and Compounding Can Help Average Investors Beat the Market
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It is possible for average investors to beat the market by owning quality stocks long-term and letting compounding work. You don't need to take excessive risks.
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Focus on proven "blue chip" companies with durable competitive advantages, strong growth prospects, and reasonable valuations. Stocks like Booking Holdings, Zoetis, UnitedHealth, and Elevance Health.
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Aim to own the highest quality companies from the market index, not all 500. Outperformance comes from being slightly better over time, not hitting home runs.
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Increase allocation to top companies when valuations become attractive, such as during market pullbacks. Don't try to time markets perfectly.
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Consistently beating the market by small margins compounds over decades to meaningfully greater wealth. This accelerates the path to financial freedom.