@saintdc Because it is naturally diversified and has historically performed very well. It’s incredibly rare to find anyone who can beat the market consistently over decades. It’s not a good bet for short term needs, but if you’re in grad school like the OP and don’t plan on needing the money for 10+ years it’s really the only way to go.
@loreec What happens when the market takes a dive ? I've seen so many people say to invest in the s&p and then I've heard so many stories from coworkers about all the money they have lost in their 401K. I see how so many things out of our control can just tank a stock and others it's just purely manipulated. Pumping and dumping for their own gains.
@drphileo When stocks take a dive you hold and continue to buy more. When it recovers you will be in a better spot than when you started. This is only appropriate when you have a longer time horizon. People with short time horizons (like they want to use it to buy a house in next couple of years) are taking a massive risk.
@kristenn What happens when the stock never recovers and then I've read " well you should have set a stop loss". How when the goal was to hold until you recovered? For how long are you holding or investing? Is the goal not to sell and profit from the gains?
@drphileo That’s why you diversify in multiple companies so that way your entire portfolio isn’t dependent on the performance of one company. Index funds hold 100’s if not thousands of companies so you are able to diversify away the unsystematic risk.
