In my new book Smarter Than The Street, I discuss at length the great myth of index investing. When you put your money in a so-called index fund, you're not only taking a passive approach to investing, you're also passing up all the lucrative investment opportunities that present themselves in any kind of market.
In short, you'll lose money when the market goes down and limit your gains when stocks rally. Every generation has its own Apple. You just have to find it.
And that's why at the end of the day, you need to know how to pick stocks if you want to create wealth. Just ask anyone who owned the Fab Five.
Programming note: "The Strategy Session," hosted by David Faber and Gary Kaminsky, airs weekdays at Noon ET on CNBC.
Gary Kaminsky does not hold any equity positions.
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