How Can Retail Investors Choose Stock Portfolios?
Investors commit a lot of time to their portfolios. At times, stock picking can seem like a lost art. Under constant pressure from passive investing, mutual funds, and ETFs, buying individual stocks is minor and less common. New retail investors still typically view buying single-picked equities as the essence of investing. Much financial education literature aims to ''correct'' them of this opinion. The rationale for this is that stock pickers underperform the overall market. This statement is true. But that doesn't necessarily mean a retail investor shouldn't buy individual stocks, or at least know how to. Most advise holding a broad index, passive fund, or low-cost actively managed equity fund to gain your broad equity exposure necessary for retirement. This decision is wis...
