If Index Funds are so good why does everyone not invest in them but individual stocks?
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First, Fund managers are banned from investing in index funds. Instead, it’s used as a baseline for them to beat. Often times, they don’t beat.
Second, some rich people have particular fetishes, they want their money to be only in certain sectors, stocks, only during certain seasonality, esg investing, small caps, etc.
Third, there are risk on and risk off periods where you actually don’t want to be in index funds. For example, currently there are high geopolitical tensions, so boomers are hiding in energy stocks and utilities/consumer staples/gold.
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