[brewer12345]

My experience has been different, so naturally I have a different view. I have had a few epic losers in my portfolio, but the winners have far and away outweighed the losers. In part, I started picking individual stocks because I started investing in 1999, when it was very clear (even to a neophyte like me) that the equity market was very, very irrational. The money had to go somewhere for a return better than a savings account, and the only thing I knew about was equities. So I started picking individual businesses to invest in. Since I knew the indexes were ridiculously overvalued, I started out (and continue to) looking for attractive stuff that was available for cheap. I found it mostly in the stocks of small companies that the market was ignoring or misunderstanding, and that is still where I find the best stuff.

I have no intention of blindly investing in the indexes in asset classes that I can understand and exploit. I am now starting to short a lot of stuff, either openly or via puts. I think that holds the potential for even better returns than going long SCV. Why? Because so many investors either won't or are not allowed to go short. Any time there are restrictions, there is money to be made for nimble players.

Naturally, if you don't have the time, inclination, or aptitude, indexes may be a very good idea.