The flaw is thinking that the market builds great wealth it doesnt, only having large amounts of the right stocks produces wealth but that can be said about anything moving in your favor, including risky bets. After all, placing $50,000 in roulette on an even money bet and winning five times in a row while leaving your entire stake at risk will produce $1.6 million lying on the table. If you kept $50,000 in reserve after the first spin, so that even if you lost it wasnt any of your original risk capital youd have $800,000 on the table at the fifth spin.
The stock market is a form of gambling; its just that it offers you greater protection from losing your money all at once, while offering you extremely high returns if you pick the right stock and are able to hold it while it goes up incredibly far. In traditional gambling you dont have the luxury of holding onto your losers to hope that they come back but in stocks and commodities trading you can fool yourself into still believing you have an investment.
If most of your investments will be made in U.S. financial markets because you consider the U.S. stock market the most efficient in the world because it is huge, highly liquid, well regulated, and thoroughly studied please consider the following: It will be almost impossible for the average investor to know something about the value of a particular stock that someone else hasnt already discovered and acted upon. Without the ability to discover and act on quality information or other essential knowledge you are gambling and will almost always be too far removed from guiding your investment to great wealth.
So perhaps the best answer for the average investor is to focus on his or her finances rather than on controlling his or her investments. There are risks in any approach to investing; sometimes the greatest thing we can embrace is luck.