I don't think that even a sophisticated investor could understand many of the instruments that Goldman was selling; so for the most part I think people should h

I don't think that even a sophisticated investor could understand many of the instruments that Goldman was selling; so for the most part I think people should have taken that as a warning. (Hell, even Warren Buffett was saying he couldn't understand derivatives and the odds of a given investor being sharper than Warren are low). I agree with you on the ethical issues but I didn't believe them to be particularly trustworthy in the first place, all of their incentives are lined up to do things that will make them money and their advice will be tainted by this. Re: Index funds and cash - yeah, they aren't going to get you stellar returns. Cash in particular gives you poor dividends. The point of these is that the chance of your money vanishing is low and they require little time investment, enabling you to focus on your area of expertise instead. If I had to choose areas to invest in that would (potentially) give better returns, I'd try: 1) Investing in oneself. ie improving skills, becoming better known, etc. Much easier to get above market returns here, of course. 2) A small number of small/medium size companies in unfashionable areas you can study and understand; basically stocks where there is the potential for decent growth and comparatively few people are looking. 3) Well chosen property for the leverage. You'd need to really spend time choosing well or the leverage would potentially fuck you over.