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Most professional money managers aim to pick winning stocks and outperform the market, but evidence suggests that the majority fall short. One study found that 79% of large-cap domestic equity funds underperformed the S&P 500 in 2025, while another found that 95% of actively managed large-cap core funds lagged the S&P 500 over the past 10 years after fees.
The results help explain the growth of the ETF industry in recent years. When active funds frequently underperform the index, investors may prefer an ultra-low-cost index fund designed to match market performance rather than attempt to beat it.
Buying individual stocks means betting on the success of specific companies. Because each position is effectively a “sample size of one,” outcomes can range from strong gains to severe declines. The article cites examples of large, well-known companies experiencing sharp downturns over multi-year periods, illustrating that even successful firms can face prolonged weakness.
By contrast, broad stock market funds—such as the Vanguard S&P 500 ETF (VOO) and the Vanguard Total Stock Market ETF (VTI)—spread exposure across many companies. While this does not eliminate downside risk, it can reduce the impact of any single stock’s performance on overall returns.
A key benefit highlighted in the article is that a stock market index fund evolves as the market changes. Sector leadership shifts over time—for example, the S&P 500’s largest sector today is technology, while earlier periods featured different leading sectors such as financials and energy, and in more distant decades, railroads.
Owning a broad market ETF therefore means the portfolio’s mix can adjust with the economy rather than leaving an investor concentrated in companies that may lose influence over time. The article also points to low costs, noting that the expense ratios on the two Vanguard ETFs mentioned are both 0.03%.
The article does not argue that stock picking is inherently wrong. Instead, it suggests that individual stock selection may have a role in a larger portfolio, while a broad market ETF can serve as the core foundation.
In brief\n\nBitcoin dropped to about $93,000, falling back below the EMA50 and putting its recent golden cross at risk of invalidation. The global crypto market cap stands at $3.15 trillion, down 2.38% in 24 hours. On Myriad Markets, 82% of the money is betting on Bitcoin pumping to $100K before…