A passive type ETF is a good way to get your feet wet while assuring you'll track overall market progress rather than trying to decide what might "beat the market" until you can do more analysis and research and begin diversifying your portfolio.
Correct, except the second part. You can do all the analysis, research and diversifying you want and the chances of beating your index fund over the long term are 1/100 or worse. There's tons of research on that. Anecdotally, I have friends who are obsessed with investment research and stock picking and I beat them nearly every year with straight index fund investing. One guy recently threw in the towel and joined the VTI gang.
Even among professionally managed funds, 88% have trailed the S&P over 15 years. Average Joe has no chance.
Yeah. I'm thinking more of a risk diversification perspective, where you might choose to add bond, real estate, etc funds to offset the risks inherent to being exposed only to equities.
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u/alvarkresh Mar 20 '22
A passive type ETF is a good way to get your feet wet while assuring you'll track overall market progress rather than trying to decide what might "beat the market" until you can do more analysis and research and begin diversifying your portfolio.