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Well the idea of an index, whether done through a fund or not, is to buy some of each company. A value investing approach would be to find the better stock and
by fipple 8y ago
Well the idea of an index, whether done through a fund or not, is to buy some of each company. A value investing approach would be to find the better stock and invest in it, so Coke stockholders would rarely own Pepsi stock and vice versa.
- Glyptodon 8y agoStill, even without index funds, the first thing most people are told is that diversification is key and that sector allocation matters more than the specific companies you hold. Plus people want to mitigate risk, so they buy a little of each thing that matches whatever profile, and soon a sector essentially has unified ownership interests rather than competitive (and antagonistic) ownership interests.