If Index Funds are so good why does everyone not invest in them but individual stocks?
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Why pay Vanguard 0.1% or whatever the fee is these days when you can keep that. Brokerages have all gone to $0 commission trades on stocks. You can also avoid paying taxes more easily by investing in companies that don’t pay dividends in your taxable account, saving the dividend paying companies for your IRA.
There is also a non zero chance in the case of some long tail catastrophe that ETFs would decouple from the underlying companies and it helps to remove that risk. Similar to how Credit Default Swaps decoupled from the underlying bonds during the 2008 financial crisis because of AIG’s failure.
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