4 ms·

ETFs are a trap. Put most of your money in single stocks. It is ok to diversify, you don't need an ETF for this.

by coliveira 5mo ago

sentientslug 5mo ago
This is terrible advice, are you buying and self balancing hundreds of different stocks?
- NewJazz 5mo ago
  Direct indexing is a thing.
  - ifwinterco 5mo ago
    It’s a thing but your order execution won’t be as efficient as an ETF, so you will be losing a non-negligible amount each year in slippage from the large number of small transactions
    - cheinic6493 5mo ago
      > It’s a thing but your order execution won’t be as efficient as an ETF, so you will be losing a non-negligible amount each year in slippage from the large number of small transactions Not necessarily ETF managers execute block trades outside the normal market, sometimes through dark pools, not even reported to the public. Fidelity, Vanguard, etc ask JPMorgan, Goldman to execute these block trades and pay them a fee. This fee can exceed the “slippage” a retail investor can face.
    - tasuki 5mo ago
      You don't have to do the large number of small transactions, you know? Just diverge from the index, it's fine!
      - NewJazz 5mo ago
        If you are making regular contributions to an account, then you may be able to rebalance via purchases alone.
    - coliveira 5mo ago
      Unless you're over trading (which is not the goal) you'll pay very little because you're buying and not selling for several years. This will end up being less than the fee you pay to the ETF every year.
- conception 5mo ago
  I can’t say I’ve tried this but the thought just came to me that generating such trades would be trivial to do monthly now.
  - marcyb5st 5mo ago
    In some countries (like Switzerland) you don't have any capital gain tax __unless_ you are a professional investor. What makes you a professional investor? One of the things that can elevate you to that status is the amount of trades you make. So I am sure this is not viable for many people as buying an ETF counts like 1 trade, but investing the same money in the underlying assets count like 10s of trades.
    - coliveira 5mo ago
      Unless you have huge amount of money to play, there is no need to buy dozens of stocks every month. If you already have a portfolio of several stocks, you can buy just one or two every month and increase your portfolio. If you are just starting, you can buy a few more, or decide to start just with the most boring and safe stocks like coca-cola or IBM.
  - 0xDEAFBEAD 5mo ago
    Sure, if you want to print a 1000 page supplement and staple it to your taxes. More seriously, I would still worry about order execution and transaction costs. You are likely to end up on the wrong side of the bid/ask spread when playing against the big boys. If you're actually serious about this, you might as well start your own ETF. Or just buy this one I found after a quick Google: https://www.proshares.com/our-etfs/strategic/spxt https://www.proshares.com/our-etfs/strategic/spxt Buying multiple sector-specific ETFs is another approach. I'm told that utilities are good to hold during a downturn.
- juleiie 5mo ago
  It is very true what they said. In an ETF you get both bad stocks and good. You have no choice. If you diversify manually you can pick and choose only the crème de la creme But… people love to be lazy or just aren’t knowledgeable enough to pick their stocks themselves and thus it is safer for them to just stick to broad strokes of an index fund. For starters as basic portfolio, you could 1:1 an index fund but take out all the garbage from it and keep only the strong, bright future companies. ETF are just noob introduction to the stock market and great one at that but to maximize returns you want to be more specific and intentional about your picks. Where etfs are great even after you learn a lot, is exposure to whole sectors of the industry. That’s how I treat them: one - etf - an index of how a particular industry fares. Source: I basically live solely from investments at 30
  - andsoitis 5mo ago
    If that were true, then one would expect a competitive fund that does just that and that give higher ROI than an S&P 500 index fund (or index ETF) when you consider expense ratio. What is a such a fund? Or, alternatively, can you point us to a comprehensive list of those companies you would exclude from the index to get superior returns?
    - juleiie 5mo ago
      My returns are around 20 percent per year for years. I lack will and energy to list everything I owned but it’s basically a method of value investing + momentum trading so two opposites. You could say it’s a diversification of investing philosophies. Honestly it’s a free for all game so no one has any interest to share their secrets and methods. When you lose money I make money. Better player wins.
      - andsoitis 5mo ago
        > My returns are around 20 percent per year for years. That's unbelievable! Even Warren Buffet only makes 19% - 20% compounded every year. That would make you one of the top investors ever.
- coliveira 5mo ago
  What is the problem? If you buys a SP500 ETF you're effectively buying 500 stocks. You don't need that much, but if that is your wish it is still better than using ETFs.
- HWR_14 5mo ago
  Diversification is good, but you probably don't need 100s of stocks.
pixelatedindex 5mo ago
> It is ok to diversify Nay, it is not just “ok”. It is imperative that you diversify if you want a strong and resilient portfolio.
- juleiie 5mo ago
  Oops wrong comment
cleaning 5mo ago
I prefer the casino.
skippyboxedhero 5mo ago
return on the average stock is -2% iirc, terrible idea
Danox 5mo ago
Absolutely, I moved all my investments to single stocks that I thought would do well that decision the best that I’ve ever made from an investment standpoint, the returns are infinitely better…

ETFs are a trap. Put most of your money in single stocks. It is ok to diversify, you don't need an ETF for this.

sentientslug 5mo ago

This is terrible advice, are you buying and self balancing hundreds of different stocks?

NewJazz 5mo ago
Direct indexing is a thing.
- ifwinterco 5mo ago
  It’s a thing but your order execution won’t be as efficient as an ETF, so you will be losing a non-negligible amount each year in slippage from the large number of small transactions
  - cheinic6493 5mo ago
    > It’s a thing but your order execution won’t be as efficient as an ETF, so you will be losing a non-negligible amount each year in slippage from the large number of small transactions Not necessarily ETF managers execute block trades outside the normal market, sometimes through dark pools, not even reported to the public. Fidelity, Vanguard, etc ask JPMorgan, Goldman to execute these block trades and pay them a fee. This fee can exceed the “slippage” a retail investor can face.
  - tasuki 5mo ago
    You don't have to do the large number of small transactions, you know? Just diverge from the index, it's fine!
    - NewJazz 5mo ago
      If you are making regular contributions to an account, then you may be able to rebalance via purchases alone.
  - coliveira 5mo ago
    Unless you're over trading (which is not the goal) you'll pay very little because you're buying and not selling for several years. This will end up being less than the fee you pay to the ETF every year.
conception 5mo ago
I can’t say I’ve tried this but the thought just came to me that generating such trades would be trivial to do monthly now.
- marcyb5st 5mo ago
  In some countries (like Switzerland) you don't have any capital gain tax __unless_ you are a professional investor. What makes you a professional investor? One of the things that can elevate you to that status is the amount of trades you make. So I am sure this is not viable for many people as buying an ETF counts like 1 trade, but investing the same money in the underlying assets count like 10s of trades.
  - coliveira 5mo ago
    Unless you have huge amount of money to play, there is no need to buy dozens of stocks every month. If you already have a portfolio of several stocks, you can buy just one or two every month and increase your portfolio. If you are just starting, you can buy a few more, or decide to start just with the most boring and safe stocks like coca-cola or IBM.
- 0xDEAFBEAD 5mo ago
  Sure, if you want to print a 1000 page supplement and staple it to your taxes. More seriously, I would still worry about order execution and transaction costs. You are likely to end up on the wrong side of the bid/ask spread when playing against the big boys. If you're actually serious about this, you might as well start your own ETF. Or just buy this one I found after a quick Google: https://www.proshares.com/our-etfs/strategic/spxt https://www.proshares.com/our-etfs/strategic/spxt Buying multiple sector-specific ETFs is another approach. I'm told that utilities are good to hold during a downturn.
juleiie 5mo ago
It is very true what they said. In an ETF you get both bad stocks and good. You have no choice. If you diversify manually you can pick and choose only the crème de la creme But… people love to be lazy or just aren’t knowledgeable enough to pick their stocks themselves and thus it is safer for them to just stick to broad strokes of an index fund. For starters as basic portfolio, you could 1:1 an index fund but take out all the garbage from it and keep only the strong, bright future companies. ETF are just noob introduction to the stock market and great one at that but to maximize returns you want to be more specific and intentional about your picks. Where etfs are great even after you learn a lot, is exposure to whole sectors of the industry. That’s how I treat them: one - etf - an index of how a particular industry fares. Source: I basically live solely from investments at 30
- andsoitis 5mo ago
  If that were true, then one would expect a competitive fund that does just that and that give higher ROI than an S&P 500 index fund (or index ETF) when you consider expense ratio. What is a such a fund? Or, alternatively, can you point us to a comprehensive list of those companies you would exclude from the index to get superior returns?
  - juleiie 5mo ago
    My returns are around 20 percent per year for years. I lack will and energy to list everything I owned but it’s basically a method of value investing + momentum trading so two opposites. You could say it’s a diversification of investing philosophies. Honestly it’s a free for all game so no one has any interest to share their secrets and methods. When you lose money I make money. Better player wins.
    - andsoitis 5mo ago
      > My returns are around 20 percent per year for years. That's unbelievable! Even Warren Buffet only makes 19% - 20% compounded every year. That would make you one of the top investors ever.
coliveira 5mo ago
What is the problem? If you buys a SP500 ETF you're effectively buying 500 stocks. You don't need that much, but if that is your wish it is still better than using ETFs.
HWR_14 5mo ago
Diversification is good, but you probably don't need 100s of stocks.

pixelatedindex 5mo ago

> It is ok to diversify Nay, it is not just “ok”. It is imperative that you diversify if you want a strong and resilient portfolio.

juleiie 5mo ago
Oops wrong comment

cleaning 5mo ago

I prefer the casino.

skippyboxedhero 5mo ago

return on the average stock is -2% iirc, terrible idea

Danox 5mo ago

Absolutely, I moved all my investments to single stocks that I thought would do well that decision the best that I’ve ever made from an investment standpoint, the returns are infinitely better…