Why Stock Picking Fails - And Why SPY Or VTI Is All You Need

Summary

• For most investors, especially beginners, I recommend avoiding individual stock picking and instead investing in broad market ETFs.
• SPY and VTI both offer diversified, low-cost exposure to the US stock market, but SPY's concentration in blue-chip firms has led to better returns and lower drawdowns.
• VTI includes mid- and small-caps, which can boost returns in early bull markets but also increase volatility and downside risk during downturns.
• My recommendation: beginners should go 100% SPY for higher returns and stability; seasoned investors can add VTI tactically; retirees can choose either based on yield preference.

Andrzej Rostek

A good friend of mine, who is at the beginning of his wealth accumulation phase, approached me a few days back, asking me whether I could recommend him any stocks worth investing in right now for a long-term compounding where he could earn

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SPY, VOO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.