What makes you think that picking stocks is no better?
What is an Index, but a portfolio of stocks someone else has picked?
Your entire base asssumptions are flawed.
People may choose to pick stocks instead of pre-defined (indexes) or
third-party defined (mutual funds) portfolios because:
a) they trust their judgement better than others (don't you?)
b) they can choose their risk level (and correlating return potential)
c) they may be sophisticated investors (expert in certain industries)
d) they may choose to invest in companies they trust, share vision with, or
share moral values.
e) they may wish to conduct their own due diligence on their investments
(read the prospectus, SEC filings, etc).
Adam
----- Original Message -----
From: "fabio guillermo rojas" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Friday, July 12, 2002 6:56 PM
Subject: Why do people pick stocks?[via LSMTP - see www.lsoft.com]
If it is common knowledge that picking stocks is no better than
using an index, then why is stock picking so popular?
Ie, why do people accept lower returns just for the privilige of
picking the stocks themselves?
Fabio
