Investing in averages

You can get rich by picking individual stocks, but only if you are extremely lucky. There is, however, an alternative method: Just invest in index funds. That enables you to track the stock market. There are variations to this, such as the Magic Formula, which in reality is a refinement on indices. I intend to use it for a while, let's see what happens.
But the thing is that both this method, and traditional index funds, use averages. They look at the total stock market (or a number of representative stocks), and then they get a decent yield - on average. Stock pickers want to beat the average, just as we want to believe we can do better than the guy next to us when we buy a lottery ticket.
The reason the stock market goes up over the years, on average, is very simple: It represents an increase in value in society. Think about it: Stocks are actually shares in companies. Companies work to create value (for stakeholders in the best of worlds). As the companies become better at this, as they increase the market, the stock market must go up if it is truly to reflect the underlying values (it would even if stock prices were constant, since the market capitalizations could increase).
When you do your everyday job, you strive to add value to other people. It may be removed from the actual person, and you may only rarely receive feedback, but that is what companies are about. The stock market is a reflection on this. So, since capitalism works, and since there is a market for shares in companies, the average value goes up and index funds work over time. Simple, but boring - just like all averages.