In his 2009 book with George Ackerlof, Robert Shiller, who shared a Nobel Prize in economics for his work developing behavioural finance wrote:
there has been one way, at least in the past, in which almost everyone could become at least moderately rich
… Invest it for the long term in the stock market, where the rate of return after adjustment for inflation has been 7% per year’
Shiller’s ex-post observations on stock market returns in 2009 do not sit well with his ex-ante prediction in 1996:
long run investors should stay out of the market for the next decade.
via Institutional Economics: ‘Light Reading It’s Not’ – Forbes.
The joint advice of both the efficient market advocates such as Eugene Fama and the behavioural finance theorists on how to manage your retirement and other long-term savings are the same:
Buy and hold. Diversify. Put your money in index funds.
Pay attention to the one thing you can control–costs–and keep them as low as possible.
Index-linked or passive investment funds minimise their trading of shares and do not hire research departments so their costs and fees are far lower than investments funds that trade actively in the market trying to beat the market.
About 97% of these active funds fail to beat the market. The rest may just have been lucky.
- The average actively managed investment must underperform the indexed investment when all costs are deducted.
- The actively managed investments that beat the indexed investments this year fail to consistently beat the index in the future.
Investors can win higher returns by shouldering more risk and all that entails, and the reward for bearing risk vary over time and across assets.
Utopia, you are standing in it! 
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