Why bother picking stocks, just go with S&P index etf (SPY)

[Future beach bum]

I spent my whole life investing in various stocks, thinking I was smarter than the others and could outperform the market. I did ok, but some of the success could have just been luck. I now only trade in stock indexes, as I hated the insider information and manipulation that would occur with individual stocks. I don't believe that is possible with a large index fund such as SPY. So in your AA, whatever portion you put into stocks, why not just purchase SPY (or another equivalent index fund)? I don't think I will ever purchase an individual stock again. I am curious why others don't follow this method.

 

[haha]

I spent my whole life investing in various stocks, thinking I was smarter than the others and could outperform the market. I did ok, but some of the success could have just been luck. I now only trade in stock indexes, as I hated the insider information and manipulation that would occur with individual stocks. I don't believe that is possible with a large index fund such as SPY. So in your AA, whatever portion you put into stocks, why not just purchase SPY (or another equivalent index fund)? I don't think I will ever purchase an individual stock again. I am curious why others don't follow this method.

Yours may be a very controversial post. Very few people here are index investors, mostly we do options and commodities.

Ha

 

[foxfirev5]

As an Indexer I hope more people continue to try to beat the market. Being average is great for me in this case.

 

[UserRequested]

Perhaps. But I do enjoy the thrill of investing in individual stocks as well. I go for only blue chips though. 50% in indexed, the other half in hand picked stock

 

[comicbookgujy]

I pick individual stocks and I would be better off with the S&P 500...but i do it for the thrill...it's my form of gambling because though I know the house always win.

 

[jimnjana]

I think index funds play a major part in portfolio planning. I think actively managed funds and or individual security selection do as well. So, I'm firmly on both sides of the fence. Core is index funds.

 

[nun]

The only controversy here should be whether the S&P500 is a broad enough index.

 

[youbet]

I spent my whole life investing in various stocks, thinking I was smarter than the others and could outperform the market. I did ok, but some of the success could have just been luck. I now only trade in stock indexes, as I hated the insider information and manipulation that would occur with individual stocks. I don't believe that is possible with a large index fund such as SPY. So in your AA, whatever portion you put into stocks, why not just purchase SPY (or another equivalent index fund)? I don't think I will ever purchase an individual stock again. I am curious why others don't follow this method.

Whatever you're doing now, well..... that's what you're doing. Enjoy!

 

[photoguy]

thinking I was smarter than the others and could outperform the market.

Who thinks they are "dumber" than other investors?

 

[Onward]

Very few people here are index investors, mostly we do options and commodities.

 

[Midpack]

[SARCASM]Yours may be a very controversial post. Very few people here are index investors, mostly we do options and commodities.[/SARCASM]

Ha

FIFY (he/she is a newbie...)

 

[Animorph]

Indexing is fine, but look much wider than SPY. Value, small, international, EM are good too.

 

[Stanley]

I found I made more money picking the correct AA, than I did picking stocks.

 

[marko]

I dunno. After all is said and done, my carefully chosen/monitored set of stocks and AA pretty much runs in line with the indexes, with a little bond mitigation thrown in.
Which is pretty much the observation of the OP.

 

[l2ridehd]

Your stock may match index funds today, but try to do it for 30 years. Even Peter Lynch gave up. Follow a LazyTraders slice and dice 6 fund portfolio and you will sleep well, stop watching the market, and beat most every stock picker out there. However to the OP's question, SPY is a fairly narrow index fund, mostly just US large cap, instead use a very low cost Total stock market, Total International, Emerging Markets, Total Bond, Small Cap and an FTSE all World except US. That gives you diversification. Maybe add some TIPS for inflation protection.

 

[Brett_Cameron]

+1

 

[Future beach bum]

Thanks for your replies (I appreciate the humorous ones too). What I got out of the replies is that some still like the thrill (individual stocks are more of a crapshoot), which I admit I will miss. But I am not trying to make a nest egg (I am done) but rather get a reasonable return and avoid having to follow individual stocks. It seems to me there would be more commission expense, but with discount brokers that is not a significant issue.

I do agree I should diversify more, SPY was just a general example of an index fund. I really just want to invest in a few index funds to diversify, and then just rebalance once a year.

 

[arky]

I do agree I should diversify more, SPY was just a general example of an index fund. I really just want to invest in a few index funds to diversify, and then just rebalance once a year.

Google "three fund portfolio".

 

[Mulligan]

Who thinks they are "dumber" than other investors?

Based on my past, I couldn't look myself in the mirror, if I didn't admit I am dumber. But since, I did a better job saving this past year than I had planned, I allowed myself the opportunity to fail again and invest/gamble10k in a stock. Bought 200 shares of Intel, last week and it promptly went down 75 cents. Bought another 200 at session low yesterday, and now I am back to even almost already. Maybe I can figure out away to buy this stock all the way down to zero and still break even. My "serious money" is in IBonds, CDs, Total Market, and STAR.

 

[M Paquette]

Yours may be a very controversial post. Very few people here are index investors, mostly we do options and commodities.

Ha

Awww! Now I gotta get all this coffee off the keyboard and out of my sinuses.


I know I'm a dumb investor. Lazy, too. I just set up an asset allocation between stock funds and bond funds (55%/45%) Then I guessed at a weighting between the total US market, and total international market (70%/30%). For bonds, I just went with an intermediate term US fund, and a Treasury Inflation Protected Securities fund, split 50/50.

Once a year I check to see if things have gotten too far out of whack (pick a number, e.g. more than +- 25% from where I want them), and rebalance if needed. I did that last week, first time since the Great Rebalance of 2009. The rest of the time I can play with the cats, tinker with cars or radios, or annoy people on the Internet.

 

[Running_Man]

I invest in individual stocks because I believe many stocks in the indexes are overpriced because they are purchased because they are in an index. My method of picking individual stocks have been over performing S&P 500 index for years and provides nice cash flow with a relatively low level of risk. But if you do not wish to do the work to buy individual stocks then I think indexing is the best way to go.

 

[okapi]

About my last 15 years on the j-b I put my 401k into Vanguard Wellington fund cause I got disgusted with myself.Coulda done better,but coulda done alot worse.Kept investing each paycheck.Try this,pick 10 stocks you think you would buy and hold for the year.See how you do.Like flipping a coin you will have good and bad years.

 

[bcinvest]

I don't follow that method because my portfolio performs markedly better picking individual stocks. It would cost me far too much money to index.

 

[unclemick]

I spent my whole life investing in various stocks, thinking I was smarter than the others and could outperform the market. I did ok, but some of the success could have just been luck. I now only trade in stock indexes, as I hated the insider information and manipulation that would occur with individual stocks. I don't believe that is possible with a large index fund such as SPY. So in your AA, whatever portion you put into stocks, why not just purchase SPY (or another equivalent index fund)? I don't think I will ever purchase an individual stock again. I am curious why others don't follow this method.

It's a male hormone thing. Resistance is futile. I still have 'a few good stocks' which contributed maybe 10% of my retirement - the rest being 'Bogle's Folly' aka 500 Index Fund.

heh heh heh - Investing since 1966, retired 1993, I am proud to say that I didn't watch the Superbowl for the first time in living memory. Of course the Saint's weren't in it and alas I still have a few good stocks BUT 60% of my retirement income is VG life cycle type index funds.

 

[chasesfish]

I'm a fan of the 50/50 approach, I like individual stocks in the taxable account. Its easier to manage/expect the tax bite, and easier to make donations with individual stocks