Investors pick individual stocks to build portfolios rather than use index funds. Our preference is to use commission free ETFs.
Next to not following “The Golden Rule of Investing,” the error of not using index funds is likely the biggest mistake investors make. Remember – The Market is smarter than you are. While there are investors who are good stock pickers, be realistic. Are you one of them? The law of averages is working against stock pickers. The over whelming evidence is that most investors would be better off putting their money in index mutual funds or index ETFs. Don’t get caught in the trap of using actively managed index securities.
Although these posts are short, they pack an important punch. Fifty years (50) of investing teaches one a lot of lessons and there are still more to be learned.