ninja1024

The answers above are excellent. To perhaps clarify #6 a bit:

Suppose you are a worker who invests. As a worker, you are inherently exposed to the economic cycle. In a recession, your probability of job loss increases and your probability of raises/big bonuses goes in the tank. To diversify away this risk, you will want your basket of risky assets to be weighted towards non-cyclical assets.

Now suppose that you are independently wealthy and therefore a non-worker. The fact that workers who invest are bidding up non-cyclicals relative to cyclicals leads to cyclicals being relatively undervalued. You don't care about cycle risk, because you are rich. In a recession, if your stock portfolio takes a bigger-than-average hit, that's okay, because you aren't relying on it for liquidity purposes. You do, on the other hand, care about your long-run average return (as just about everyone does). So you are happy to scoop up the relatively undervalued cyclical stocks.

Just another example of why it is good to be rich. Hopefully with all this hard work I will get there some day!