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I have a very smart mentee. A few months back he found me on the Internet and asked me if I could mentor him. Since he seemed to be genuinely willing to learn, I could not turn him down. His name is Bob.

Why is Bob smart? Because he has never bought a single stock and yet he is making money in the stock market. He has never bought a stock yet because he has yet to develop a sound stock trading method. That's why he asked me for help.

So how is he making money in the stock market? By buying mutual index funds. It works for him just fine as it has worked for many others. The simplest and probably the most reliable way to make money in the stock market is by investing in the mutual index funds, the funds that buy stocks that mirror the composition of Dow Jones or Standard&Poor 500, two major US stock market indices.

These days you can also buy Exchange Traded Funds (ETF) that are based on DJ or S&P 500, which could be another way to do the same. In fact, this way could probably save you some costs as well.

Will this method always work? Yes, with the exception of major depressions such as the one that started with the crash in 1929 or major man-made or natural disasters that would disrupt the normal life as we know it for many years. But even then, if the stock market remains open, as it has been the case for a very long time in the history of the United States, if you keep averaging down your investment, you are bound to recover relatively quickly and proceed to make a fortune.

Why am I so certain about it? Well, this has to do with the nature of the stock market and the forces that drive it. These forces find their roots in the technology that changes all the time giving rise to new business ventures that make things that millions of people cannot resist buying or find absolutely indispensible for their everyday lives or careers sooner or later.

Computers, the technology that took the world by storm over the last 20-30 years, is one very good example of that. Certainly everybody who considers himself in touch with the world must have heard of Apple or Microsoft or Dell. These are pretty much household names these days, although the last of them was hardly known even 15 years ago. But this did not stop there. The computer technology spawned new industries, new businesses, some of which are also extremely popular. Ever heard about Google? I am sure, you have. It's only 10 years old, but its owners are already multi-billionaires and many of its employees and stock holders have been made millionaires as well.

Technology is the driving force behind the wealth creation in our modern society and as long as this process continues and nothing seems to be able to stop it yet, I am absolutely sure that the stock market will keep roaring for many years to come. Thus the broad stock market as measured by major indices is virtually bound to do well because of that in the long run, save for major disasters I already mentioned, where this may be impossible. So keep buying mutual index funds and enjoy your ride.

And yes, you can make even more money trading individual stocks, but for this more knowledge and more effort on your part is required. That may not suit everyone. For everyone, though, the mutual index funds are the way to go.

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