Psychologically, I couldn't hold an ETF and forget about it. I'd be ecstatic with its performance right now, but say I was holding an S&P 500 index fund between 2007 and 2009, and it lost half it's value along with the S&P... I would be far too irritated with myself. But if I tried to time the market, I could totally see myself selling near the bottom of a bear market and then only getting up the courage to buy far, far into the next bull - also a disaster.
By letting experts handle it, I get someone who understands my risk profile and helps allocate my money across a range of investments, some risky, some quite conservative. When market conditions change, they react, not me. While I don't capture all the gains I could when the stock market shoots up 50%, I don't lose that (and sometimes still make gains) when the stock market goes south. I'm hedged somewhat against rare events, which knocks a bit off the performance of my portfolio in the good times but pays off well should there be bad times.
I looked into setting something up like this myself, but I couldn't do it with a single ETF - I would pretty much have to make it a full-time job. Far better to pay an expert to do it for me - I don't do my own amateur lawyering, so why would I do my own money management?
Have you considered just keeping some fraction of your assets in cash (CD, money market account, treasury bonds)?
If you have 50% of your money in a Treasury and 50% in S&P, then when the market loses half its value, you only lose 25% of your money. But when the market goes up, you get a smaller gain.
> I don't do my own amateur lawyering, so why would I do my own money management?
An actual lawyer will generally be much better at lawyering than someone without training. Financial professionals probably aren't going to do much better than someone without training.
And then there are rampant perverse incentives in this industry, i.e. financial professionals are too often paid when they sell you financial products you don't need, and aren't paid based on your portfolio's performance.
By letting experts handle it, I get someone who understands my risk profile and helps allocate my money across a range of investments, some risky, some quite conservative. When market conditions change, they react, not me. While I don't capture all the gains I could when the stock market shoots up 50%, I don't lose that (and sometimes still make gains) when the stock market goes south. I'm hedged somewhat against rare events, which knocks a bit off the performance of my portfolio in the good times but pays off well should there be bad times.
I looked into setting something up like this myself, but I couldn't do it with a single ETF - I would pretty much have to make it a full-time job. Far better to pay an expert to do it for me - I don't do my own amateur lawyering, so why would I do my own money management?