Why do you need index funds... for the scatterbrains.

Safe index funds are the ones where it has a basket of stocks such as S&P 500.

Dangerous index funds are spot indexes for Bitcoin (where it doesn't have diversification)

If you sometimes forget to manage your own portfolio, then diversified index funds are perfect for you.

When it comes to investing, there are investment vehicles where you must plan for an exit such as options / monthly passive income strategies / higher risk trades for individual stocks (such as AI).

However, we are all so busy (doctors/engineers/programmers) and sometimes forget to monitor our position.

If you know you are too busy to time an exit, then use index funds for the majority of your portfolio.

If you entered into a low, great - you don't need to exit for many years to come

If you entered at a high, just continue to dollar cost average and you will be fine long term. (This is not true for individual stocks - refer to EV and Fintech in recent years)

Index funds (mostly) always come back, especially S&P 500.

For the scatterbrains, use index funds.

For individual trades, you can use automation and rules to make monitoring for an exit easier

Cheers,

Eric

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Eric Seto

Chartered Professional Accountant (CPA)

Chartered Investment Manager (CIM)

Founder of 5MinInvesting.com

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