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Great story… I love index funds and I can’t understand why anyone would get another job just so they can “try” to outperform.
I am just wondering if managing and actively timing etfs and lets say 5 stocks is much easier than having a portfolio of 30 to 50 stocks to actively manage.
From my experience, taking unsystematic risk is one way of beating market returns, but that hasn’t worked for me. Inspiration from Jeremy Grantham, I think it might be possible and easier in picking the winning asset classes than individual stocks in a single market. What do you think?
As far as I’m concerned, 30 to 50 stocks is pretty much impossible for one person. Mutual funds may have that many stocks within their portfolio but they have teams of analyst and computer models to weed out much of the hands on research that smaller traders need to do by themselves.
When most people talk about active trading, they are talking about 3-5 stocks already.
ETFs make things much easier though and is a good medium for the total passive investor vs the stock trader.
I ditto your feelings….. I also think there’s still a meaningful difference between totally passive investing vs. doing your own research and picking stocks. I’m not a trader, but I only own one or two ETFs. I already own several individual stocks so I try not to buy ETFs that already include them. Don’t need that extra overlap. Thanks for sharing these details – makes me glad that’s not my job!:)