That’s the point. Most investors are served perfectly fine by an index fund and functional broker. That’s it.
Active trading and expensive funds are your enemy as an unsophisticated investor. VTI or ITOT and chill, and as long as you have income, discipline, and an emergency fund you’ll do better than most.
My point is that ETFs by definition are a group of stocks, often grouped by sector unless talking about a whole-market ETF.
For example you could have invested in SPY, or QQQ, or IWM at the bottom of the bear market in 2008, and walked away with vastly different returns on Dec 31, 2021. Those are all indexes. Even from 2020 onwards, if you had picked XLE you would have had different returns till date than if you invested in XLU or some green energy ETF, or even 2020's darling, ARKK.
Just saying invest in an ETF doesn't mean anything. They are baskets of stocks, and as the macro environment changes, some ETFs will perform better than others. In effect, even an all-encompassing ETF (VTI?) will only perform well in a bull market. Just because we've been in a decades-long bull market doesn't mean stocks will keep going up forever.
Is the answer stock picking? Absolutely not. However, ETFs are not the "practically risk-free return" they are sometimes billed as.
Entry and exit points are material, but you don’t know when to enter and exit to maximize profit, hence “time in the market beats timing the market.” On average, you should come out ahead (based on available data and back testing).
These are well worn passive capital market investment principles, with copious amounts of supporting data. As an individual, it is very difficult to do better than long duration broad equities basket exposure with a low expense ratio.
For example you could have invested in SPY, or QQQ, or IWM at the bottom of the bear market in 2008, and walked away with vastly different returns on Dec 31, 2021. Those are all indexes. Even from 2020 onwards, if you had picked XLE you would have had different returns till date than if you invested in XLU or some green energy ETF, or even 2020's darling, ARKK.
Just saying invest in an ETF doesn't mean anything. They are baskets of stocks, and as the macro environment changes, some ETFs will perform better than others. In effect, even an all-encompassing ETF (VTI?) will only perform well in a bull market. Just because we've been in a decades-long bull market doesn't mean stocks will keep going up forever.
Is the answer stock picking? Absolutely not. However, ETFs are not the "practically risk-free return" they are sometimes billed as.