Quote:
Originally Posted by DoubleF
The point really isn't about the $1K position affecting the over portfolio or diversification. Plus I'm mentioning people with pure mutual fund/ETF portfolios who aren't truly constructing portfolios anyways. It's more along the lines that bank stocks are IMO the easiest stocks to really understand from a newbie/amateur point of view. If ultimately stocks aren't your thing, by all means do ETF and mutual funds. But I think that if you're going to store your life savings into these things, you should understand what these things are in general.
But perhaps I am just ranting in an outdated manner. Me saying that a small dabble in bank stocks to understand the stock vehicle is perhaps akin to me being incredulous that people no longer want to learn to drive. IMO it's a life skill that everyone should have in case of emergency etc. even if you don't regularly drive. But everyone else is content with mutual funds/ETFs as one would be happy with transit/uber etc. Furthermore, my beef with mutual funds is outdated with some of the newer rules. I just hated how in the past some of them could be kinda greasy with their admin fee rules etc. They'll claim you get a 5% gain or something, but after fees, you're sitting on like half of that.
Old man yelling at clouds here. Sorry ya'll.
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No, I realise that these people aren't building a portfolio. The thing is the mutual fund is though and that's kind of a big deal. It doesn't seem like it in the first week of 2020 because in 2019 literally everything worked. This is in direct contrast to 2018 where basically nothing worked in the final quarter. Regardless, I'm not defending mutual funds on the larger scale. That said, for certain applications they're the best thing going. From a tax perspective there are funds that are undeniably the best option IMO. For smaller investors who need risk management and diversity a managed mandate of some sort (be that an ETF or fund of some sort) is going to provide that.
I do think you're overestimating peoples interest in stocks and investing though. It's interesting to you and me and probably most people in this thread. But for the average population they have little to no interest I'd say. It's probably akin to me at a car dealership. I need a car; I have some interest while I'm looking for a car and probably should learn more about what I'm doing there, but I have a job and wife and kids and such. Learning about cars and all that only carries so much interest to me. So when the time comes I look around and let a professional do the heavy lifting. That's the financial industry these days.