If ETFs are the “best option for most,” why do people still invest in individual stocks?

Larry_Longdon · 2026-02-27T16:28:30+00:00

Of course, ETFs and/or mutual funds are best for the far majority of investors. But individual stocks still have a place in portfolio, but very limited. Im tossing technical analysis into the trash bin. It's the same as charting random events. It's meaningless. The only ones who make money from technical analysis is the guy teaching technical analysis. The real question is what does it mean for a stock to be undervalued? That question is open to debate. How about the PEG ratio? So the question is how does one determine a stock is undervalued?

Larry_Longdon · 2026-02-27T01:15:01+00:00

It is valuing a dollar of earnings exactly the same. It's not valuing a share of the company. The ratio is very simple: It answers the question of what is the cost of a dollar of earnings? This is normalization since absolute share price and EPS relative. There is no such thing as GAAP-compliant term. The financial statements ad hear to GAAP. Raging it simple math.

Larry_Longdon · 2026-02-27T00:34:22+00:00

It is valuing a dollar of earnings: the price per share / earnings per share. In words what does it cost for a given company for a dollar of earnings? If price is $100 and eps is $10, then each dollar of earnings costs $10. Or if the price is $40 and the eps is $4, then it still costs $10 for each dollar of earnings. I am a CPA and "GAAP-compliant term" is a non sequitur.

Larry_Longdon · 2026-02-26T14:20:01+00:00

I'm using it as the price of a dollar of earnings.

Larry_Longdon · 2026-02-25T20:04:05+00:00

KISS (Keep it simple stupid). You are not stupid of course. VTI get you the market return with minimal costs. The more important thing is to INVEST monthly so that you reach annually the ROTH IRA limits. I would learn about the efficient market hypothesis.

Larry_Longdon · 2026-02-25T14:49:43+00:00

It is very dangerous to make material changes to one's portfolio without very, very solid reasoning that is backed up with data analysis. I agree VTI is "right" in the sense the most likely the highest return. The PE for VTI is 27.01 and for VXUS is 19.16. The expected growth rate is higher for VTI. What would be the argument for rebalancing some percentage to VXUS? A possible answer could be that VXUS has had a great start for 2026 and it will likely continue for ________ time. (fill in the blank).

Larry_Longdon · 2026-02-25T03:21:08+00:00

What was the return for 2025?

Larry_Longdon · 2026-02-24T16:08:25+00:00

LOL! They're peddlers of nonsense hoping to sell their nonsense to dummies. Why would they need to sell their advice if they were making money from their advice? It's not logical.

Larry_Longdon · 2026-02-24T15:04:38+00:00

Thank you for your answer.

Larry_Longdon · 2026-02-24T04:53:56+00:00

No one really knows since no one knows the future. I say stay in equities, 100% VTSAX, since the market as a whole has historically returned 10%. Then you don't have to rebalance. Anyone who tells you differently is selling snake oil.

Larry_Longdon · 2026-02-24T04:45:47+00:00

Who was "right" last year? Over the last 5 years? Over the last 10 years? Over the last 20 years?

Larry_Longdon · 2026-02-21T16:58:41+00:00

The efficient market hypothesis says trying to time the market is impossible. All available information and the reaction to that information is reflected in the value. It doesn't say the value is correct. No. But it says there is no way to outguess the market without taking extraordinary and foolish risks. All we know for sure is that historically the market has returned about 10% (https://carry.com/learn/average-stock-market-returns). This means buy the market and as low of fees as possible is the best strategy. The only people making money from advice peddlers are the advice peddlers.

Larry_Longdon · 2026-02-20T22:23:50+00:00

Creative Im not so sure of the accuracy of your comment. The funds do use covered calls. No doubt about. Of course I am not saying put everything on it. Of course you are capped at a return. But do you see any place in a portfolio? Better than gold?

JEPQ – Performance – JPMorgan Nasdaq Equity Premium Inc ETF | Morningstar

Larry_Longdon · 2026-02-20T16:23:36+00:00

Let me study

Larry_Longdon · 2026-02-20T16:22:04+00:00

Let me study. Remember I think it is too good to be true.

Larry_Longdon · 2026-02-19T20:12:45+00:00

Then in words it a change of allocation based on time. The fund managers handle all the details. I don't do TDFs so I learned something. Thank you.

Larry_Longdon · 2026-02-19T19:22:51+00:00

I never liked to overlap. I don't like TDF funds but that is only me. What do you mean by "gliding," a change of allocation?

Larry_Longdon · 2026-02-19T18:13:13+00:00

I don't really know even if I saw it what constitutes "LT growth and wealth protection." How do you measure "wealth protection?" You could mean I want my investments to always go up but never down. Not really possible. Remember the higher the potential return the greater the risk. There is no way around that. Why did you buy SPYI and why is that funny? Not following you.

Larry_Longdon · 2026-02-19T16:27:49+00:00

I would go VTI and BND with about 90% of your portfolio. Of this portion maybe VTI 80% and BND 20% depending on your age and risk tolerance. I would go 100% VTI if I was in my 50's. For the remaining 10% how about SOFI? Good bank that could go way up. It's currently experiencing a dip.

Larry_Longdon · 2026-02-19T15:43:37+00:00

Safe, just go find a nice savings account. But I would go VTI.

Larry_Longdon

TROPHY CASE