Been thinking about how to make money in stocks lately, and honestly it's way simpler than most people make it out to be. The key isn't trying to time the market or pick the next big winner. It's about patience and sticking to what actually works.

Let me break down what I've learned from looking at actual market data. So there's this study from Putnam Investments that tracked investors over 15 years. Those who just stayed invested the whole time saw about 9.9% annual returns. Sounds decent, right? But here's the crazy part - if you missed just the 10 best trading days during that period, your returns dropped to 5%. Miss 20 best days and you're looking at 2%. Miss 30 and you're actually losing money at -0.4% annually. That's the problem with trying to time things.

This is why the buy and hold approach actually works. You can't predict when the market's best days will hit, and they often come right after the worst days. So trying to jump in and out just kills your returns. The whole point of how to make money in stocks is staying in the game long enough to catch those big moves.

Now, most people ask me whether they should pick individual stocks or go with funds. Honestly? Funds are the move for most of us. Yeah, it sounds cooler to say you own Apple or Tesla, but the reality is even professional investors struggle to consistently pick winners. Funds - especially index funds tracking the S&P 500 or Nasdaq - let you get that diversification without needing a ton of capital or expertise. You're basically betting on the market as a whole, which historically returns around 10% annually. That's solid.

One thing people sleep on is reinvesting dividends. Those small payouts seem pointless at first, but the math is wild. From 1921 to 2021, the S&P 500 averaged 6.7% annual returns. But when you reinvested those dividends? It jumped to almost 11%. That compounding effect is real. Most brokers let you set this up automatically through a DRIP program.

Then there's the account question. Where you hold your investments matters just as much as what you buy. Tax-advantaged accounts like 401(k)s and IRAs let your money grow without getting taxed on gains every year. That's huge for long-term wealth building. The catch is you can't touch that money until 59½ without penalties. Regular taxable accounts give you flexibility to pull money out whenever, and you can do tax-loss harvesting tricks to offset gains. Choose based on your timeline and needs.

The real answer to how to make money in stocks? Stop overthinking it. Get into diversified funds, set it and forget it, reinvest your dividends, and let time do the work. Warren Buffett himself says the same thing. It's boring, but boring is exactly what makes it work. Most people lose money trying to be clever. Winners just stay patient.